Weekly Reports | Sep 24 2024
Hyperscaler Microsoft follows Amazon into a major nuclear energy supply contract but this fails to lift activity and price enthusiasm in the spot market. Paladin's Fission acquisition in question; Lotus Resources scoping study reveals higher costs and global banks commit to nuclear funding.
-Spot uranium market remains in the doldrums
-International Atomic Energy Agency forecasts on the up
-Is Lotus the new Paladin?
-Financing drought breaks
-Short sellers lift positions
By Danielle Ecuyer
Lack of activity becalms spot market
In what transpired as another listless week of activity, industry consultants TradeTech report the spot market experienced a lack-of-buying interest, with downward pressure on the U308 price, as sellers sought to attract buying interest.
The spot price declined -US$0.75 to US$79.25 with a further 50,000lb transactioned after the close of market on Friday at US$79lb.
TradeTech explains the disconnect between the spot market and the more bullish longer-term scenario as the time difference between current levels of demand and the longer lead times of bringing new nuclear generating capacity on stream.
The highlight of the week for U308 enthusiasts came with Friday's announcement between Constellation Energy and Microsoft in a 20-year off-take agreement for nuclear power to feed the technology giant's growing data centre energy demand.
The project involves the restart of Three Mile Island Unit 1, five years after it was decommissioned, under the name of the Crane Clean Energy Centre.
An estimated 3,400 jobs both direct and indirect will be involved for the investment to restore the plant, including approval from the US Nuclear Regulatory Commission.
Constellation aims to the bring the project on stream by 2028 adding around 835MW of energy to the grid.
While the medium to longer term outlook for demand continues to improve, as TradeTech highlights, it will be multiple years before increased nuclear power capacity equates to buying interest.
The consultants also point to the absence of buying interest from hedge funds and investors which were prevalent between 2021 and 2023. Buying interest in the spot market is characterised by a "small number of players and trading is thin".
TradeTech's Mid-Term U308 Price Indicator is US$86lb, and the Long-Term Price Indicator US$82lb. The term markets are where more of the Geo-politics and longer-term supply dynamics come to the fore.
In addition to Kazatomprom's recent announcement that shipments can no longer be facilitated to Europe via St Petersburg (see last week's Uranium Weekly, listed below), the US government is investigating the possible exportation of Chinese enriched uranium while the country is importing enriched uranium from Russia.
In other macro news, the International Atomic Energy Agency's Energy, Electricity and Nuclear Power Estimates for the Period up to 2050 were released last week.
TradeTech observes for the fourth year in a row the Agency has increased expectations for global nuclear capacity, now estimating it will expand two-and-a-half times current capacity by 2050 compared to 2023.
Australian uranium miners in focus
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