Weekly Reports | Nov 28 2023
With financial funds re-entering the market, the spot uranium price jumped strongly again last week.
-Uranium spot price on a tear
-Concern over US legislation
-France looks to build more reactors
-Interest increasing in term markets
By Greg Peel
Having risen US$3.75 the week before, the uranium spot price rose another US$3.50 last week to US$80.75/lb on industry consultant TradeTech’s weekly spot price indicator.
TradeTech’s indicator has added US$33.15/lb U3O8 in 2023, an increase of 65%. The indicator currently sits at a 15-year high, and 355% above the decade-low of US$17.75/lb seen in December 2016.
That low came five years after the Fukushima disaster, which not only shut down Japan’s nuclear energy production but raised questions regarding reactor safety and led to a nuclear pushback among the Japanese, and also led to some European countries to move towards shutting down nuclear capacity.
Events in the interim have nevertheless caused some reconsideration.
The increase in the spot price over the past few weeks has been fueled by increased buying interest across all types of buyers and for all time periods, notes TradeTech. Spot uranium buyers last week included financial funds, traders, and suppliers.
Supply Concern
One of the factors influencing demand for spot material is the growing concern in some circles of the market that language restricting future imports of Russian nuclear fuel into the US after 2028 could be attached to various pieces of legislation that may advance soon.
All indications are this is not imminent, but the spectre of such a development has pushed some entities to hedge against the possibility.
The US House and Senate passed their respective versions of the National Defense Authorization Act in July and the House moved to go to conference in September. Numerous energy policy items, including nuclear legislation, are in the balance and the market is closely monitoring developments related to discussions on these issues. This has naturally drawn additional interest from the financial community.
Currently, a number of new parties are evaluating entry into the uranium space and additional funds are flowing into the sector as evidenced by the news from the Sprott Physical Uranium Trust
SPUT’s net asset value has surpassed US$5.0bn, having grown US$630m since its launch in July 2021. Over that period, SPUT’s unit price has increased by more than 100%.
Across the Globe
In France, the government said last week it would make a decision by year-end 2026 on whether it will support plans to build another eight large-scale commercial reactors, which is in addition to the six nuclear power plants it already plans to build.
President Emmanuel Macron has already said France could build as many as 14 new reactors by 2050, as part of the country’s plan to reach carbon neutrality by the middle of the century.
The UK and South Korea last week signed a clean energy pact that will see the two nations strengthen cooperation on shared ambitions across the clean energy transition, low-carbon technologies, civil nuclear, and domestic climate policies.
Term Markets
Increasing uncertainty around the legislative situation in the US, along with rising costs in the production and transportation sectors, have sellers reconsidering their positions. Sellers are aware of the tightening supply situation, TradeTech notes, especially in the period between now and 2028, and are increasing their prices for mid- and long-term offers.
In recent months, the rise in offer prices and uncertainties associated with logistical and government actions that may disrupt future deliveries of Russian nuclear fuel prompted several utilities to accelerate their procurement plans.
TradeTech’s term price indicators remain at US$75.00/lb (mid-term) and US$65.00/lb (long).
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| 1AE | 24/11/2023 | 0.0800 |  -11.11% |
$0.22 | $0.05 | |||
| AGE | 24/11/2023 | 0.0600 | 0.00% | $0.07 | $0.03 | $0.080 |  33.3% |
|
| BKY | 24/11/2023 | 0.3550 | – 2.74% |
$0.80 | $0.28 | |||
| BMN | 24/11/2023 | 2.7300 | 2.95% |
$3.05 | $1.19 | $3.200 | 17.2% |
|
| BOE | 24/11/2023 | 4.3500 | 5.00% |
$4.98 | $1.97 | 48.2 | $4.543 | 4.4% |
| DYL | 24/11/2023 | 1.1300 | 0.00% | $1.41 | $0.48 | $1.840 | 62.8% |
|
| EL8 | 24/11/2023 | 0.4800 | – 5.77% |
$0.59 | $0.27 | |||
| ERA | 24/11/2023 | 0.0340 | 0.00% | $0.30 | $0.03 | |||
| LOT | 24/11/2023 | 0.2800 | – 1.67% |
$0.32 | $0.15 | $0.530 | 89.3% |
|
| NXG | 24/11/2023 | 10.7700 | 5.90% |
$10.63 | $5.11 | |||
| PDN | 24/11/2023 | 1.0100 | 3.50% |
$1.15 | $0.52 | 171.6 | $1.165 | 15.3% |
| PEN | 24/11/2023 | 0.1100 | 28.05% |
$0.20 | $0.08 | $0.270 | 145.5% |
|
| SLX | 24/11/2023 | 3.3500 | – 1.47% |
$5.32 | $2.56 | $5.800 | 73.1% |
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