Weekly Reports | May 02 2023
The uranium market sprang back into action last week following a global conference.
-Spot U3O8 market action returns
-Term market also active
-Uranium miners issue glowing results
-China continues to build reactors apace
By Greg Peel
There’s nothing like a global conference to rev up the action in uranium markets.
The month of April saw very little action in the spot market as buyers and sellers remained stuck on either side of the spread, refusing to budge. But when market participants returned from the World Nuclear Fuel Cycle 2023 conference held in The Hague up to April 20, it was all hands on deck.
Nine transactions were completed in the last week of the month, industry consultant TradeTech reports, totalling 900,000lbs U3O8 equivalent. Not only were the usual suspects back in trading, utilities also joined in after eschewing the spot market in past months.
The sellers had the edge, with TradeTech’s weekly spot price indicator rising US$2.50 to US$53.75/lb.
For the month of April, a total of 2.1mlbs U3O8 changed hands, which rather puts last week’s 900,000lbs into perspective. TradeTech’s spot price indicator rose US$3.15 from end-March.
In addition to the action in the spot market, buyers were equally active in the mid-term uranium space last week, TradeTech reports, with four transactions concluded for delivery later this year also involving over 900,000/lbs U3O8 equivalent.
The positive market sentiment and the change in buying behaviour that panelists addressed during the aforementioned conference is evident, TradeTech suggests, in the number of utilities that are poised to make significant buying decisions soon.
Several utilities are awaiting or in the midst of evaluating offers for multiple deliveries with some utilities seeking deliveries beginning as early as next year. Some are considering potential purchases extending into 2030 and beyond.
TradeTech's term price indicators have risen from end-March to US$54.00/lb (mid) from US$51.50/lb, and US$54.00/lb (long) from US$53.00/lb.
Supply
The world’s two biggest uranium producers, Canada’s Cameco and Kazakhstan’s Kazatomprom, reported March quarter results last week.
Cameco recorded more than double the earnings posted in the same quarter last year, which was the result of higher deliveries and higher average realised prices in both the uranium and fuel services segments.
“We remain in the enviable position of having what we believe are the world’s premier, tier-one assets operating in a stable geopolitical region,” said Cameco’s CEO. “Amid the heightened supply risk caused by geopolitical developments, utilities continue to evaluate their nuclear fuel supply chains and are looking to diversify the origin of their supply”.
In other words, away from Russia.
Kazatomprom reported that while March production fell marginally, as planned, total sales and realised prices were notably higher during the period. Total sales volumes more than doubled in the quarter.
Demand
China continues to maintain its leading role in the growth of nuclear power globally as it has 24 reactors under construction today, according to the China Nuclear Energy Association.
To date, China has 54 commercial power reactors in operation, which ranks the Asian nation third worldwide, TradeTech notes.
The International Atomic Energy Agency Director hailed China's efforts to achieve peak CO2 emissions before 2030, and carbon neutrality by 2060, noting that as the world's largest energy consumer, China has made significant strides in low-carbon development, including the development of nuclear energy.
According to the Agency, nuclear energy is a crucial component of China's plan to reduce greenhouse gas emissions, improve energy accessibility and security, and stabilise international energy market prices.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| AGE | 01/05/2023 | 0.0320 |  – 3.03% |
$0.08 | $0.03 | |||
| BKY | 01/05/2023 | 0.3650 | 0.00% | $0.46 | $0.25 | |||
| BMN | 01/05/2023 | 1.3800 |  2.60% |
$2.49 | $0.15 | |||
| BOE | 01/05/2023 | 2.5600 | 12.78% |
$3.03 | $1.61 | $3.310 | 29.3% |
|
| DYL | 01/05/2023 | 0.5150 | 0.98% |
$1.25 | $0.48 | $1.040 | 101.9% |
|
| ERA | 01/05/2023 | 0.0400 | – 9.09% |
$0.34 | $0.04 | |||
| LOT | 01/05/2023 | 0.1950 | 5.41% |
$0.33 | $0.15 | $0.350 | 79.5% |
|
| NXG | 01/05/2023 | 5.5700 | 1.64% |
$7.51 | $0.00 | |||
| PDN | 01/05/2023 | 0.6500 | 4.00% |
$0.96 | $0.53 | -19.2 | $1.097 | 68.7% |
| PEN | 01/05/2023 | 0.1450 | 3.57% |
$0.24 | $0.12 | 145.0 | $0.340 | 134.5% |
| SLX | 01/05/2023 | 3.1900 | – 8.07% |
$5.32 | $1.22 | $5.000 | 56.7% |
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