Weekly Reports | Feb 13 2024
Recent uncertainty surrounding global uranium production has led to spot price volatility around the US$100/lb mark.
-Uranium spot price falls
-Uncertainty in Kazakhstan and Canada impacting
-Broker picks in the Australian-listed space
By Greg Peel
Recent confirmation from Kazatomprom it would likely miss its early targets for production in 2024 and 2025 due to challenges with sulphuric acid deliveries and wellfield development, that 2024 guidance has been downgraded by -13%, and that 2025 remained “uncertain”, had the spot uranium price pushing through the psychological US$100/lb mark and up to US$107/lb.
The spot price had been surging up to that level based on supply uncertainty and speculative players in the market. Now the US$100 mark has been reached, prices have exhibited increased volatility.
Last week news emerged the president of Kazakhstan had ousted his cabinet and had given Kazatomprom a number of tasks aimed at improving the company’s performance. The news caused market participants to step back to assess the potential impact of the developments, industry consultant TradeTech reports.
With a total of 850,000lbs U3O8 changing hands last week, TradeTech’s weekly spot price indicator fell -US$4.00 to US$103.00/lb.
Contagion?
The drop was largely in response to the reaction of investors and speculative buyers who were expecting the difficulties highlighted by Kazatomprom would flow over to Canada’s Cameco, one of Kazatomprom's joint venture partners, TradeTech notes. However, Cameco expects to weather the interruption in Kazatomprom production by utilising a variety of tools, including inventories and its diverse asset portfolio.
Cameco issued December quarter and full year results last week, reporting net earnings and cash from operations in 2023 more than doubled compared with 2022, as the company benefited from higher sales volumes and realised prices in its uranium and fuel services segments.
Cameco also highlighted as of end-2023 it had commitments for delivery of an average of about 27mlbs of uranium per year from 2024 through 2028.
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