Weekly Reports | Mar 19 2024
The spot uranium price fell sharply last week as sellers became more agitated.
-Uranium spot price falls -US$7/lb
-Kazatomprom warns of lack of inventory
-Still no news on Russian uranium sanctions
By Greg Peel
Industry consultant TradeTech’s weekly uranium spot price indicator last week fell -US$7.00 to US$86.00/lb and is now down -19% from its US$107/lb peak earlier this year.
The price remains at a 16-year high and is up 72% year on year, and 385% above the decade-low seen in 2016.
The recent price fall is attributed to two main factors, TradeTech notes, and they are both related to the psychological impact of triple digits.
When the spot price crossed the US$100/lb mark, utilities, who are not major spot market participants at the best of times, declined to buy at such prices. Speculative entities, now holding vast amounts of physical material, saw triple digits as a good place to take profits, having spent years amassing their inventories.
But even as prices fell back into the nineties, and speculative volumes were cleared, utilities showed little interest, and sellers, mostly intermediaries, became frustrated and started lowering prices. Five transactions were reported last week at prices between US$90 and US$84/lb.
Kazatomprom
Kazakhstan’s mostly state-owned uranium producer Kazatomprom, which represents some 40% of global U3O8 supply, released its 2023 earnings result last week. Ahead of the release, Citi was expecting a 2025 U3O8 production target downgrade and/or lower inventory levels, citing constrained sulphuric acid availability and ramp-up challenges that make Kazatomprom’s current 2025 production target unlikely.
Citi was bullish on spot uranium on that basis. As it turned out, Kazatomprom did not cut its prior 2025 production guidance, although again highlighted the scarcity of sulphuric acid as a major impediment. It did warn, however, that due to lower inventories – down -23% in 2023 from 2022 – sales will be lower in 2024.
Not that the news had any positive impact on spot prices.
Under the Big Top
Last week the US House of Representatives Foreign Affairs Subcommittee on Europe held a hearing on potential sanctions on Rosatom – Russia’s state-owned uranium producer — and the importation of Russian nuclear fuel into the US. There has been no news.
TradeTech reports some uranium market participants are preparing for the possibility that sanctions could be attached to the “minibus” spending bill as House and Senate appropriators are expected to turn to the remainder of the appropriations bills, which now have a March 22 deadline.
Other parties in the market speculate the Biden administration could take executive action if legislators are unable to reach agreement on a package sanctioning Russian fuel imports.
Either way, consensus believes there will be some form of sanction on Russian exports imposed in the coming weeks or months.
Term Markets
Utilities may be unwilling to pay triple-digit prices in the spot market but when it comes to securing medium term supply, from sources other than Russia, they are indeed willing.
Ongoing uncertainty over Russian imports only steels their resolve.
TradeTech’s term price indicators remain at US$100/lb (mid-term) and US$75/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 | 18/03/2024 | 0.1100 |  – 8.33% |
$0.19 | $0.05 | |||
| AGE | 18/03/2024 | 0.0560 |  3.70% |
$0.08 | $0.03 | $0.100 | 78.6% |
|
| BKY | 18/03/2024 | 0.2900 | – 6.45% |
$0.80 | $0.26 | |||
| BMN | 18/03/2024 | 3.1900 | 3.91% |
$3.99 | $1.19 | $7.040 | 120.7% |
|
| BOE | 18/03/2024 | 4.8500 | 2.54% |
$6.12 | $2.08 | 99.8 | $5.697 | 17.5% |
| DYL | 18/03/2024 | 1.2250 | 0.41% |
$1.76 | $0.48 | $1.725 | 40.8% |
|
| EL8 | 18/03/2024 | 0.5000 | 6.38% |
$0.68 | $0.27 | |||
| ERA | 18/03/2024 | 0.0500 | 0.00% | $0.22 | $0.03 | |||
| LOT | 18/03/2024 | 0.4050 | 3.85% |
$0.41 | $0.15 | $0.610 | 50.6% |
|
| NXG | 18/03/2024 | 11.3700 | 1.07% |
$12.99 | $5.11 | $17.500 | 53.9% |
|
| PDN | 18/03/2024 | 1.2450 | 0.40% |
$1.46 | $0.52 | 365.5 | $1.513 | 21.5% |
| PEN | 18/03/2024 | 0.1100 | 4.76% |
$0.20 | $0.08 | $0.340 | 209.1% |
|
| SLX | 18/03/2024 | 4.5700 | – 6.73% |
$5.78 | $2.92 | $7.600 | 66.3% |
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.
FNArena is proud about its track record and past achievements: Ten Years On
