Weekly Reports | Jun 13 2023
With more financial entities hitting the uranium market, spot prices are steadily rising.
-Sellers backing off, buyers rising to meet them
-US/UK enter nuclear agreement
-Questions over resilience of conversion supply
By Greg Peel
The consensus around support for nuclear power globally is encouraging utilities to take action to lock in supplies today, notes industry consultant TradeTech. But it is not just utilities that see this as a turning point for the nuclear industry. Financial entities are also taking a closer look at nuclear with several making new forays into the market.
The variety of buyers in the spot uranium market encompasses not just end-users, but traders, producers, and an increasing number of financial parties. As a result, sellers have begun raising their offer prices and finding that they are meeting little resistance from buyers.
Last week six transactions totalling over 600,000lbs U3O8 were concluded at progressively higher prices in the uranium spot market. TradeTech’s weekly spot price indicator rose US$1.65 to US$57.25/lb.
The indicator has risen 7% in the last month and approximately 17% since the beginning of the year, and is up 12% from a year ago.
In the term uranium market, no new transactions were recorded for the week, although a number of utilities are in the midst of evaluating not only their procurement policies, but their inventory or stock building programs as well, TradeTech reports.
TradeTech’s term price indicators remain at US$59.00/lb (mid) and US$55.00/lb (long).
Mind the Gap
The World Nuclear Fuel Market held its Annual Meeting and International Conference last week in Ljubljana, Slovenia, where the theme of the conference was “Mind the Gap.”
Attendees were reminded throughout the conference, by a variety of industry experts, of the changing geopolitical climate and that supply and demand fundamentals are at a critical juncture for the uranium, conversion, and enrichment markets. Moreover, without critical infrastructure and contractual support from both government and industry participants, the markets could face supply deficits within the coming decade.
To that end, The US Department of Energy announced last week it is seeking feedback on two draft requests for proposals (RFP) to acquire high-assay, low-enriched uranium (HALEU) — a crucial material needed to develop and deploy advanced reactors in the US.
The UK and US launched a first-of-its kind economic partnership, named the Atlantic Declaration, which aims to reduce vulnerabilities across critical supply chains through cooperative action. The Declaration also establishes a new civil nuclear partnership aimed at keeping Russia out of the global civil nuclear power market.
Teams from the US and UK governments will meet regularly to drive action.
Demand-Supply
Both buyers and suppliers continue to closely monitor restart activities at Honeywell’s Metropolis Works Facility in the US. The plant, which experienced delays in start-up due to unexpected weather conditions, continues to move forward with the ramp-up and is expected to enter production in the coming weeks.
While the delays in the start-up of the Metropolis Works Facility are relatively minor, TradeTech notes, given the natural delays in restart of any facility that has been on care and maintenance for years, concerns for the market are mounting given the lack of back-up production supplies.
Questions over the resiliency of the conversion supply chain continue to grow as the expectations for contributions from nuclear power generation increase globally.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| AGE | 12/06/2023 | 0.0400 |  – 2.70% |
$0.08 | $0.03 | |||
| BKY | 12/06/2023 | 0.4650 |  1.09% |
$0.50 | $0.25 | |||
| BMN | 12/06/2023 | 1.5000 | – 0.66% |
$2.49 | $1.19 | |||
| BOE | 12/06/2023 | 3.2400 | 1.29% |
$3.23 | $1.61 | $3.310 | 2.2% |
|
| DYL | 12/06/2023 | 0.7350 | 2.08% |
$1.25 | $0.48 | $1.040 | 41.5% |
|
| EL8 | 12/06/2023 | 0.3200 | – 5.88% |
$0.64 | $0.27 | |||
| ERA | 12/06/2023 | 0.0310 | 0.00% | $0.30 | $0.03 | |||
| LOT | 12/06/2023 | 0.2000 | – 5.13% |
$0.30 | $0.15 | $0.350 | 75.0% |
|
| NXG | 12/06/2023 | 6.7400 | – 3.59% |
$7.10 | $0.00 | |||
| PDN | 12/06/2023 | 0.7500 | 6.92% |
$0.96 | $0.52 | -20.4 | $1.097 | 46.2% |
| PEN | 12/06/2023 | 0.1800 | – 5.26% |
$0.21 | $0.12 | $0.340 | 88.9% |
|
| SLX | 12/06/2023 | 4.2900 | 0.71% |
$5.32 | $1.55 | $5.000 | 16.6% |
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