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Uranium Week: Onwards Ever Upwards

Weekly Reports | Dec 05 2023

Spot and term uranium prices continue to rise, with supply constraints looming in the 2026-28 period.

-Spot uranium price moves higher again
-Term prices also on the move on supply concerns
-Once eschewed, nuclear energy now a feature of COP discussions

By Greg Peel

The uranium spot price continued higher last week, up another US75c to US$81.50/lb on industry consultant TradeTech’s weekly indicator. At end-November the spot price was up US$6.75 from end-October.

A mismatch between prices for delivery at different delivery locations across the globe has continued, and TradeTech notes this is not unusual in the uranium market, particularly as year-end approaches.

Typically the gap will close once traders exploit the arbitrage opportunity, but this won’t necessarily happen quickly due to the lack of liquidity and limited number of market players, each with their own competing internal objectives and goals.

The other factor influencing the increase in the spot price during November has been the rise in buying interest from all types of purchasers across all time periods. Spot uranium buyers last month included financial funds, traders, utilities, and suppliers.

There remains concern US Congress will move to limit supplies of Russian enriched uranium, ahead of other “friendly” sources catching up. This is an issue that’s been hanging over the market all year, and it doesn’t appear there is likely to be any movement as yet, but the risk is still taken on board.

No Cop Out

The global nuclear energy industry was in the spotlight last week at the World Nuclear Exhibit in Paris. The event brought together 20,000 participants and more than 700 exhibiting companies working in activities covering the entire value chain of the industry.

A dozen countries are expected to start producing electricity from nuclear power sources within the next few years, the International Atomic Energy Agency Director General noted. According to IAEA calculations, it is necessary to double the number of nuclear reactors in the world — currently at about 400 units — to achieve the objectives of the Paris Climate Agreement.

“We already have ten countries which have entered the decision phase [to build nuclear power plants] and 17 others which are in the evaluation process,” and “There will be a dozen or 13 [new] nuclear countries within a few years”.

Also in progress is the COP28 climate conference in Dubai, which has been gaining attention for all the wrong reasons. But one development stands out.

The World Nuclear Association Director told World Nuclear Exhibit delegates that while nuclear energy has not been given much prominence at previous COP conferences, this year, “for the first time, nuclear energy, which was once the victim of political posturing, is being incorporated whole-heartedly into the climate change conversations and the mitigation plans of many, many, many countries, and certainly we are seen as a positive force at the COP meetings.”

Term Markets

In the term uranium market, a number of utilities are in the process of completing evaluations and selecting preferred supplier(s), TradeTech reports. Utilities are confronted with the confounding circumstance surrounding supply dynamics affecting the availability of uranium, conversion, and enrichment in the 2026-2028 period.

Utilities issuing Request for Proposals spanning a typical period of 2026-2032 are finding if suppliers are able or willing to provide offers for the 2026-2028 period, those offers may be for less than the requested quantity in those years and reflect higher prices than offers for 2025 or for the time period after 2028.

TradeTech’s monthly mid-term price indicator rose to US$82.50/lb at end-November, up from US$75.00/lb at end-October. The long-term price indicator has risen to US$66.00/lb from US$65.00/lb.

Uranium companies listed on the ASX:

1AE 04/12/2023 0.0800 0.00% $0.22 $0.05
AGE 04/12/2023 0.0600 1.75% $0.07 $0.03 $0.080 33.3%
BKY 04/12/2023 0.4400 25.00% $0.80 $0.28
BMN 04/12/2023 2.7900 3.32% $3.05 $1.19 $3.200 14.7%
BOE 04/12/2023 4.2100 – 3.62% $4.98 $1.97 46.6 $4.543 7.9%
DYL 04/12/2023 1.0600 – 1.82% $1.41 $0.48 $1.810 70.8%
EL8 04/12/2023 0.5200 6.12% $0.59 $0.27
ERA 04/12/2023 0.0300 0.00% $0.30 $0.03
LOT 04/12/2023 0.3100 10.71% $0.32 $0.15 $0.530 71.0%
NXG 04/12/2023 10.0300 – 4.61% $10.80 $5.11
PDN 04/12/2023 1.0300 2.93% $1.15 $0.52 175.6 $1.165 13.1%
PEN 04/12/2023 0.1100 0.00% $0.20 $0.08 $0.250 127.3%
SLX 04/12/2023 3.2600 – 5.26% $5.32 $2.56 $5.800 77.9%

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