By Greg Peel

The US Nuclear Energy Institute’s annual International Uranium Fuel Seminar was held in Beaver Creek, Colorado, last week. Global industry gatherings in the commodities markets often have the effect of revving up market participants as they all try to talk up their stories, but whether last week’s jump in spot market trading activity had anything to do with the seminar is unclear.

Whatever the case, uranium traders decided to get a little more excited last week it would seem. Industry consultant TradeTech reports traders represented the most active buying group, although all of utilities, speculators and even producers participated in a buying spree that accelerated as the week progressed.

As renewed buying interest quickly became apparent, sellers steadily backed off their prices and by the end of the week, 1.8mlbs of U308 equivalent had changed hands. TradeTech’s weekly spot price indicator has jumped US$1.90 to US$38.50/lb. It’s the biggest weekly price jump since November 2011, when the spot price suddenly leapt US$4.00 to US$52.25/lb.

Interestingly, digging back through the archives reveals that 1.8mlbs also changed hands that week. Spot market activity had been subdued in the lead-up and sellers had been forced to tick down offers to clear out material before year end. Soon a bit of buying interest became apparent, and suddenly the race was on.

We’re a month earlier this time around but otherwise the scene has played out in a very similar fashion. Clearly prices were higher back then. March of that year was when the Fukushima crisis occurred and I made the comment at the time: “Has uranium now shaken off the Fukushima blues or is this just a false dawn? Early days.”

Early days indeed. It’s taken another four years before the first Japanese reactor has been restarted.

Three transactions were recorded in the term markets last week, both mid and long, totalling 1.3mlbs. TradeTech’s weekly term price indicators remain unchanged at US$39.50/lb (mid) and US$44.00/lb (long).
 

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By Greg Peel

For several weeks the spot uranium market has been in limbo, awaiting the conclusion of a handful of term market supply deals to the tune of 6.5mlbs U3O8. Some deals were concluded last week, and industry consultant TradeTech’s weekly spot price indicator has fallen US40c to US$36.60/lb.

The spot price was actually weaker on a daily basis earlier in the week as sellers tired of waiting, but the announcements prompted sellers to pull back their offers again and hence the weekly price drop was not as bad as it might have been.

A total of 750,000lbs of U308 equivalent changed hands in seven transactions last week.

The term market saw eight transactions all up concluded last week, totalling 3.6mlbs. TradeTech’s mid-term price indicator has fallen US50c to US$39.50/lb while the consultant’s long-term indicator remains unchanged at US$44.00/lb.

The positive news for the market last week came from Japan, where Kyushu Electric Co is preparing the start up of the second of its Sendai units, representing the second of the post-Fukushima reactor restarts.

The negative news came from Australia’s Toro Energy ((TOE)), which has become the latest uranium hopeful to postpone its plans until such time as uranium prices improve. Toro’s Wiluna project was the first uranium mine to receive approval form the Western Australian government and was set to commence in 2017, with drilling having begun in 2014. But Toro has decided to put the mine on hold for now, citing uneconomic pricing.

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By Greg Peel

It’s been a few weeks now since three utilities individually tendered for mid-term delivery contracts for a total of 6.5mlbs U3O8 but as yet no news has been forthcoming. The uranium spot market has been waiting for these deals to be finalised so as to provide some indication in pricing.

Aside from these three deals in particular, the uranium market had expected further buy-side interest to emerge as activity resumed following the northern summer, but as yet nothing much has materialised. With the end of the quarter approaching, a handful of spot sellers tired of waiting and lowered their offer prices last week.

New offers are due mid-October in the spot market to deliver 800,000lbs U3O8 to one utility next year, but industry consultant TradeTech has lowered its weekly spot price indicator by US25c to US$37.00/lb.

TradeTech’s term price indicators remain unchanged at US$40.00/lb (mid) and US$44.00/lb (long).

Canada’s Cameco and France’s AREVA celebrated a milestone this week as the Cigar Lake uranium mine and McLean Lake mill commenced production. Back before the speculative spot uranium bubble burst in 2007, before the GFC and well before Fukushima, the start-up of Cigar Lake was expected by analysts to affect a turning point for the uranium price given the mine was to be the largest in the world. But then bad weather caused the mine to flood.

Even with Cigar Lake supply out of the equation, the spot uranium market managed to bubble and burst on its own. In 2008 commodity prices in general suffered a GFC-driven collapse and in 2011 Japan suffered its earthquake and tsunami. In 2007 the spot uranium price peaked at just under US$140/lb. It’s now a different world into which Cigar Lake will provide potentially substantial supply.
 

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By Greg Peel

Each year the uranium industry gathers for the World Nuclear Association symposium. Typically, the uranium spot market is busy the week before and all but dead during the week as market participants attend the symposium, where they all talk up the prospects for uranium and then return home and start buying.

Not so this year.

The spot market was indeed busy before the symposium, with 1.1mlbs of U3O8 equivalent changing hands, and quiet during the gathering, as volumes fell to 500,000lbs. But little enthusiasm was generated and last week saw only five transactions recorded totalling 600,000lbs U3O8, industry consultant TradeTech reports.

Enthusiasm may yet be generated, nonetheless, once the three utilities seeking delivery contracts for a total of 6.5mlbs beginning from 2017 finally arrive at their decisions and in so doing, provide the market with some further price indication. In the meantime, it’s just a waiting game.

TradeTech’s spot market price indicator remains stuck at US$37.25/lb for the third week running. There was one transaction reported in the term market last week, for delivery beginning 2017, but it was only for a small volume. TradeTech’s term price indicators remain unchanged at US$40.00/lb (mid) and US$44.00/lb (long).

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By Greg Peel

Uranium market participants gathered in London last week for the World Nuclear Association’s annual Symposium. As is the case each year, market activity slowed to a trickle as traders left their desks around the globe to prop up a London bar.

Industry consultant TradeTech reported only four transactions totalling 500,000lbs of U3O8 equivalent concluded in the spot market last week, compared to the 1.1mlbs traded in the preceding week ahead of what is effectively a week off for the market.

There are several tenders out from utilities for mid and long term supply contracts and spot traders are waiting to see what sort of prices they command before becoming more aggressive in either direction. Hence TradeTech’s weekly spot price indicator is unchanged at US$37.25/lb.

Having adjusted term price indicators the week before, TradeTech last week maintained a US$40.00lb mid term price and US$44.00/lb long term price indicator.

While Japan’s first restarted reactor shifted to commercial operation last week, having fired up last month, the highlight of the Symposium was news on China’s progress on nuclear energy development.

The economic slowdown in China has not undermined the country’s world-leading progress on alternative fuel development. A talking point at the Symposium was the recent release of the Implementation Plan for Speeding Up the Development of Guangdong Province’s Clean Energy Industry, which outlines plans for the province’s nuclear, natural gas and renewable energy (wind, solar) initiatives.

Meanwhile, the Symposium heard China intends to restart its nuclear reactor building program (stalled by Fukushima) in inland provinces over the next five years to meet growing power demands. Ten provinces have plans for nuclear projects and 31 proposals have already passed pre-feasibility tests.

And in a hands-across-the-water deal, The UK prime minister is next month expected to sign an agreement for the Chinese to build a prototype reactor in Essex, which would represent the first Chinese-operated reactor in the West. In return, the Chinese will help fund the construction of two more reactors, in Somerset and Suffolk, to be built by a French company.
 

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By Greg Peel

Uranium spot market activity is on the rise, industry consultant TradeTech reports. Last week saw seven transactions concluded totalling 1.1mlbs U3O8 equivalent. Traders accounted for the majority of the buying, with intermediaries and producers on the sell-side.

Increased interest from traders implies increased speculation of increasing prices. Sellers have backed off their offer prices and buyers are now seemingly more willing to pay up. TradeTech's weekly spot price indicator has risen US50c to US$37.25/lb.

While utilities may be absent from the uranium spot market, increasing spot prices reflect increasing term market interest from utilities. While only one transaction of less than 500,000lbs U3O8 was reported in the term market last week, TradeTech reports three utilities are currently evaluating offers for a total of 6.5mlbs for delivery periods beginning in 2017.

Demand in term markets is robust, TradeTech reports, although the concentration is in the mid-term delivery period. Longer term demand is less dominant at this time. Thus while having lifted its spot price indicator by US50c, the consultant has also lifted its mid-term price indicator by US$1.75 to US$40.00/lb. But the consultant's long-term price indicator has been trimmed by US1.00 to US$44.00/lb.

In news this week, Russia's state-owned nuclear energy company Rosatom has sold its Honeymoon uranium mine in South Australia to Australian-listed Boss Resources ((BOE)), having not that long ago purchased the mine from Canada's Uranium One. Honeymoon is one of only five government-sanctioned Australian uranium mines, but weak uranium prices have seen development suspended for the past two years.

Presumably it didn't make much sense to the Russian government to continue the Honeymoon when weak oil prices have seriously impacted on government finances.

In other news, Kazakhstan has now opened up a uranium trade route to North America following a deal with China. State-owned Kazatomprom has signed a deal that sees Kazakhstan and China jointly procuring temporary storage services for uranium concentrate to provide for transit through to western ports in Canada and the US.
 

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By Greg Peel

The buyers aren’t exactly kicking the door down in the spot uranium market at present, but those trying to obtain material are being forced to pay incrementally higher prices. Now that those sellers who needed to offload material ahead of the summer shutdown have been satisfied, remaining sellers see no reason to hit the bid.

Recent months have seen the spot uranium market revert to what it used to be – simply a small side market to cover shortfalls and mismatches – beyond the “real” market of end-users securing supply through term delivery contracts. The spot market is also the market for speculation, but there hasn’t been a great deal of that going on lately.

Spot market pricing will nevertheless reflect demand/supply in the term markets at any time, so while spot market volumes are relatively anaemic at present, the “real” market is reflecting growing demand and thus incrementally pushing up prices.

Industry consultant TradeTech reports only five transactions totalling 450,000/lbs U3O8 equivalent in the uranium spot market last week. However, three utilities are currently evaluating offers to supply up to 6.5mlbs of U3O8 over periods beginning in 2017. Hence while TradeTech’s term price indicators remain unchanged for now at US$38.25/lb (mid) and S$45.00/lb (long), the consultant’s weekly spot price indicator has again ticked up by US25c, to US$36.75/lb.

In global nuclear news last week, Egypt signed an agreement that will see Russia build the country’s first commercial nuclear power plant. The world’s leading producer of uranium – Kazakhstan – signed an agreement with the International Atomic Energy Agency to be the location for an internationally controlled bank of low-enriched uranium to ensure fuel supply for power plants on the one hand and stymie nuclear proliferation on the other.

South Africa’s nuclear power ambitions have hit a snag, given opposition is building within government ranks over the planned US$100bn investment in nuclear energy. The country may simply not be able to afford it, opponents argue.

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By Greg Peel

While transaction volumes in the uranium market have been mostly weak all year, the northern summer period has seen a typical slowdown on top of already tepid interest. Last week saw five transactions in the spot market, industry consultant TradeTech reports, totalling a mere 500,000lbs U3O8 equivalent.

However TradeTech notes fewer sellers are now looking to sell inventory, having been keen to do so at the start of the summer. Buyers have thus succumbed to having to pay higher prices, hence TradeTech's weekly spot price indicator is up another US25c at US$36.50/lb. Spot prices are nevertheless reflecting increased demand in the terms markets.

While there were no transactions recorded in the term markets last week, several utilities are in the market looking to secure mid and long term supply contracts. TradeTech's term price indicators remain unchanged at US$38.25/lb (mid) and US$45.00/lb (long).

Wallowing uranium prices have not discouraged the world's leading producer of uranium, Kazakhstan, from increasing steady production, TradeTech notes. Total production reached 5883t U3O8 equivalent in the year ending June 30, up from 5650t the year before. State-owned Kazatomprom held its production levels steady, having produced 3117t in the June quarter compared to 3278t in the previous June quarter.

The story is nevertheless different in the US, where there is no state-owned producer. US June quarter production of 790,000lbs was down 32% from the March quarter and 28% from the previous June quarter, and represented the lowest quarterly production since 2005.
 

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By Greg Peel

It’s been a very, very long time coming. So long that the event which would save the global uranium industry, as was assumed some years ago, passed largely without fanfare. Japan’s Kyushu Electric Power Co has managed to jump over an exhaustive array of regulatory and political hurdles, and finally the company’s Sendai unit one nuclear reactor is up and running once more.

It’s been four years and five months since Japan’s nuclear reactors were idled following the Fukushima disaster.

Kyushu Power’s Sendai unit two is expected to be similarly restarted in October. Attention now turns to whether there might be a rush to restart other Japanese reactors given there are currently 23, at 14 separate plants, under consideration. While Japan’s nuclear regulator may now have settled on a safety framework that pre-empts all disastrous possibilities, reactor restarts remain subject to local politics and the will of local residents at or near reactor sites.

Japan’s national government is on side but prefecture and local governments still have veto power.

If the first Japanese restart is a momentous occasion for the global uranium industry, there was no indication of such emanating from the uranium sport market last week. One thing Japanese power companies have not done in the last four years is dump all of their reactor stockpiles. Restarts do not imply a rush to buy fresh material.

Industry consultant TradeTech reports five transactions in the spot market last week totalling 700,000lbs of U3O8 equivalent. TradeTech’s weekly spot price indicator has risen US25c to US$36.25/lb.

Two transactions were concluded in the term uranium market, involving delivery of a total of 2mlbs. TradeTech’s term price indicators remain unchanged at US$38.25/lb (mid) and US$45.00/lb (long).
 

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By Greg Peel

Having remained stuck at US$36.25/lb for three weeks as buyers and sellers stared each other down, two weeks ago industry consultant TradeTech’s weekly uranium spot price indicator plunged to US$35.00/lb as sellers became increasingly anxious over financial commitments.

Last week saw a sudden rebound of US$1.00 to US$36.00/lb. Lower prices triggering a stampede of buyers? No. Interest remains very limited in the uranium market at present for spot delivery. Thinness is leading to volatility, and both the US$1.25 plunge and $1.00 rebound featured low levels of transaction volumes. Five transactions totalling only 475,000/lbs of U3O8 equivalent were concluded in the sport market last week, TradeTech reports.

There are some utilities sniffing around in the spot market at present, TradeTech notes, but no hint of urgency. Most of the current volume represents intermediaries trading amongst each other.

The action, if that’s not overstating it, is currently all in the term markets, which utilities use to secure delivery contracts over multi-year periods. That said, there were no term market transactions reported last week. There is, however, a line of utilities currently seeking offers for a net several million pounds of U3O8 equivalent.

TradeTech’s term price indicators remain unchanged at US$38.25/lb (mid) and US$45.00/lb (long).

The good news from last week was that Kyushu Power Co’s management plans have received regulatory approval, required to operate the company’s Sendia nuclear power units. Kyushu remains on track to restart Sendai units one and two this month, for the first time since 2011.
 

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