Weekly Reports | Mar 21 2023
The banking crisis that hit the world last week impacted on the speculative spot uranium market, while ignored by utilities.
-Uranium spot price falls on market turmoil
-Utilities press on with requests for supply contracts
-UK government labels nuclear energy as 'green'
By Greg Peel
With spot uranium now a speculative financial instrument for investors, any turmoil that hits risk assets in general will impact on uranium pricing. So it was that last week’s banking crisis, stretching from the US to Europe (albeit unrelated other than general fear), saw the spot uranium price swept along too.
Industry consultant TradeTech’s weekly spot price indicator fell -US85c last week to US$49.90/lb.
Near term noise does not affect longer term uranium demand/supply in end-user markets, hence last week utilities continued to push forward with evaluations and plans to purchase in term markets as uncertainty around geopolitical and logistical issues mount due to the ongoing war.
Utilities are requesting offers for uranium supply over a wide range of delivery periods. One US utility has indicated its willingness to consider deliveries in the 2023-2026 time frame, the 2027-2030 period, or between 2028 and 2035, TradeTech reports.
Several utilities are pre-emptively seeking to secure future supplies with jurisdictions that are viewed as more secure than Russian-sourced enriched uranium product. Utilities are looking to support existing or emerging production and are willing to consider placing a greater percentage of their portfolios under contract for longer durations with suppliers considered to be secure.
TradeTech’s term price indicators remain at US$51.50/lb (mid) and US$53.00/lb (long).
It’s Easy Being Green
The UK government has moved to classify nuclear power as “environmentally sustainable” in an effort to attract billions in private funding for an energy sector it aims to expand. The decision means that nuclear technology will be included in the UK's green investing rulebook after a period of consultation.
The move echoes an EU decision in July 2022 to label nuclear and natural gas as green technologies needed for the energy transition from fossil fuels to renewables, given the yawning gap that needs to be traversed in the interim. The war, and subsequent curtailment of energy supply, has only made that process more difficult.
Nuclear power is a key part of the UK's net-zero strategy and the government wants to build both large-scale and small modular reactors, and has committed to approving eight before the end of the decade. The private sector has been slow to invest in the sector despite a rejig of the financing mechanism introduced by the government that was designed to attract pension and infrastructure funds.
The climate-friendly label will give nuclear access to the same investment incentives as renewable energy.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| AGE | 20/03/2023 | 0.0300 |  -11.76% |
$0.12 | $0.03 | |||
| BKY | 20/03/2023 | 0.3650 |  5.80% |
$0.64 | $0.25 | |||
| BMN | 20/03/2023 | 1.2900 | -11.64% |
$2.49 | $0.15 | |||
| BOE | 20/03/2023 | 2.0300 | – 6.88% |
$3.10 | $1.61 | $3.200 | 57.6% |
|
| DYL | 20/03/2023 | 0.5350 | – 6.14% |
$1.25 | $0.53 | |||
| ERA | 20/03/2023 | 0.2150 | 7.50% |
$0.42 | $0.16 | |||
| LOT | 20/03/2023 | 0.1600 | -15.79% |
$0.46 | $0.16 | |||
| NXG | 20/03/2023 | 5.4900 | – 6.79% |
$8.99 | $0.00 | |||
| PDN | 20/03/2023 | 0.5950 | – 4.03% |
$0.97 | $0.53 | -61.0 | $1.000 | 68.1% |
| PEN | 20/03/2023 | 0.1150 | -11.54% |
$0.28 | $0.12 | |||
| SLX | 20/03/2023 | 3.5500 | 2.90% |
$5.32 | $1.18 |
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