Weekly Reports | Feb 14 2023
The Sprott Physical Uranium Trust has again raised new funds and is again active in the uranium spot market.
-Speculators pile in
-SPUT raises yet more funds
-Uranium term market interest also increasing
By Greg Peel
The uranium market saw activity heat up last week in both spot and term trading. For the spot market, it was once again all about speculation.
The week saw a total of six transactions concluded totalling 700,000lbs U3O8. The buyers were all either traders or financial entities, industry consultant TradeTech reports, and all transactions were concluded at US$50.50/lb.
TradeTech’s weekly spot price indicator has thus fallen -US50c to US$50.50/lb, reversing the prior week’s gain.
Having raised additional funds, the Sprott Physical Uranium Trust was again active, and total material held by the fund now totals 60.9mlbs.
Sanctions
Although the spot uranium price showed little price volatility this week, market participants remain alert, TradeTech notes, as the US House of Representatives Energy & Commerce Committee held a joint legislative subcommittee hearing on February 7 to consider support for American energy and efforts to lower energy costs and strengthen supply chains.
Several draft bills were discussed, including one that addresses Russian uranium imports to the US, and could place a ban on those imports, with allowances (waivers) for certain existing imports that fall within the limits of the existing Russian Suspension Agreement.
The week before, the EU discussed extending sanctions on Russia to include nuclear power, but a unanimous vote is required and Hungary will veto given Russia is building two nuclear plants in the country which will be supplied with Russian fuel.
Term Action
In the term markets, Canada’s Cameco and Energoatom, Ukraine's state nuclear utility, reached an agreement on the sale of over 40mlbs U3O8 equivalent to be delivered over a 12-year period, beginning in 2024 and extending through 2035.
New demand otherwise emerged last week in term markets, TradeTech reports. Beyond the open term demand that is visible through formal Requests for Proposals there are numerous off-market discussions underway. In addition to these formal RFPs, several utilities are engaged in off-market discussions with potential suppliers.
As geopolitical tensions escalate, utilities seem increasingly uneasy about their risk exposure and any near-term uncovered needs whether they be for uranium, conversion, or enrichment.
TradeTech’s term price indicators remain at US$52.00/lb (mid) and US$53.00/lb (long).
While global nuclear agencies are warning much more capacity is needed to reach a goal of net-zero emissions by 2050, TradeTech’s production cost indicator, which estimates the average cost of new uranium supply, sits at US$54.65/lb.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| AGE | 13/02/2023 | 0.0400 |  – 9.09% |
$0.12 | $0.03 | |||
| BKY | 13/02/2023 | 0.3500 | -22.22% |
$0.64 | $0.21 | |||
| BMN | 13/02/2023 | 1.8800 |  0.27% |
$2.49 | $0.15 | |||
| BOE | 13/02/2023 | 2.6300 | 5.37% |
$3.10 | $1.61 | $3.200 | 21.7% |
|
| DYL | 13/02/2023 | 0.7700 | 2.01% |
$1.25 | $0.55 | |||
| ERA | 13/02/2023 | 0.2600 | 1.96% |
$0.42 | $0.16 | |||
| LOT | 13/02/2023 | 0.2300 | – 2.13% |
$0.46 | $0.18 | |||
| NXG | 13/02/2023 | 6.5900 | – 0.90% |
$8.99 | $0.00 | |||
| PDN | 13/02/2023 | 0.7700 | 2.01% |
$0.97 | $0.53 | -175.5 | $1.000 | 29.9% |
| PEN | 13/02/2023 | 0.1500 | 10.34% |
$0.28 | $0.12 | |||
| SLX | 13/02/2023 | 4.8200 | 6.46% |
$5.00 | $1.04 |
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