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Uranium Week: Russia Scare

Weekly Reports | Oct 03 2023

The spot uranium price surged again last week as concerns were raised regarding shipments out of Russia.

-Russian uranium shipments halted
-Kazatomprom’s production increase
-More speculative buyers
-Too far, too fast?

By Greg Peel

The spot uranium market was rattled last week by reports of a Russian uranium shipment delay at the port of St Petersburg. Certain news outlets initially reported state nuclear group Rosatom had announced a halt to shipments of nuclear fuel to the US for reasons related to insurance.

Rosatom responded to those reports by retracting its original announcement and stating, "The Rosatom State Corporation fulfills its obligations under the concluded contracts with foreign customers in full”.

But questions were asked as to whether Rosatom was buying uranium from Western suppliers, which fed further speculation that Rosatom may be seeking alternate means to fulfill its deliveries. The Russian government has suspended shipments of other fuel exports, including oil and gas in September, with the Russian government attributing the suspensions to price inflation.

Security of Russian supply, required to keep reactors running globally until alternative sources can be bedded down, has been a source of uncertainty since the Ukraine invasion and another factor in the uranium price’s spectacular increase.

Utilities have been waiting for the US and others to ban Russian supply alongside myriad other sanctions on Russia, but so far that hasn’t happened in the short term.

But there’s More

Adding to uncertainty around Russia last week came news of a new CEO at Kazakhstan’s mostly state-owned Kazatomprom, a change in production plans, and a vote regarding the sale of uranium to China.

Sellers pulled offers as a result of increased uncertainty, but further investigation revealed an announced production increase had largely already been accounted for by the industry and is mainly committed under existing sales.

Trading resumed.

And More

While the Sprott Physical Uranium Trust gets all the attention on the financial speculation front, it's not the only player in the game.

Last week another speculative buyer, Yellow Cake Plc, announced it would exercise its existing option to take delivery of 1.5mlbs U3O8 at a price of US$65.50/lb under its contract with Kazatomprom.

Several other transactions were concluded in the term uranium market last week, industry consultant TradeTech reports.

All of the above resulted in some big moves up in both spot and term price indicators.

TradeTech’s weekly spot price indicator rose US$4.75 to US$73.15/lb. At the close of September, TradeTech’s term price indicators have risen US$11.50 to US$73.50/lb (mid) and US$2.00 to US$62.00/lb (long).

While the positive medium-long term story remains intact for listed uranium producers and soon-to-be producers, market analysts are beginning to feel the spot price, which has risen 52% year on year and 30% in the last three months, may be due for a blow-off top.

Any overdue pullback would be seen, however, as an opportunity.

Uranium companies listed on the ASX:

1AE 29/09/2023 0.1500 14.29% $0.24 $0.05
AGE 29/09/2023 0.0500 0.00% $0.07 $0.03
BKY 29/09/2023 0.3700 4.11% $0.80 $0.25
BMN 29/09/2023 2.8700 2.17% $3.05 $1.19 $3.200 11.5%
BOE 29/09/2023 4.8300 2.54% $4.98 $1.97 54.7 $4.477 – 7.3%
DYL 29/09/2023 1.3300 9.13% $1.40 $0.48 $1.840 38.3%
EL8 29/09/2023 0.5300 5.77% $0.59 $0.27
ERA 29/09/2023 0.0400 – 5.26% $0.30 $0.03
LOT 29/09/2023 0.2700 14.58% $0.29 $0.15 $0.530 96.3%
NXG 29/09/2023 9.3400 2.30% $10.40 $0.00
PDN 29/09/2023 1.1000 5.26% $1.15 $0.52 129.1 $1.253 13.9%
PEN 29/09/2023 0.1400 20.83% $0.20 $0.09 $0.270 92.9%
SLX 29/09/2023 3.3700 0.57% $5.32 $2.56 $5.800 72.1%

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