Uranium Week: Return To Quiet

In the week before last, Energy Resources of Australia (ERA) announced it was deferring its Ranger 3 Deeps project in Australia’s Northern Territory, effectively removing a possible 77mlbs of future global supply for the time being. The announcement was influential in a US$1.25 jump for the spot uranium price.

But last week initial enthusiasm for the supply reduction waned, industry consultant TradeTech reports, and prices began to drift lower by week’s end. TradeTech’s weekly spot uranium price indicator has fallen US25c to US$36.50/lb.

Supply side aside, there were several announcements regarding the uranium demand side last week.

China has developed the third generation Hualong One nuclear reactor domestically and China’s premier Li Keqiang said last week his government plans to promote nuclear power both at home, where manufacturing processes are being upgraded, and abroad, where more global deals will be sought.

Russia’s state-owned Rosatom will begin mass-producing its own reactors to meet the growing demand for nuclear power around the globe. Rosatom is building a series of off the shelf reactors which will feature design options to suit varying climates, seismic risks and other parameters.

The US and South Korea have been negotiating a civilian nuclear cooperation agreement for some years and last week it appeared a deal had finally been reached. While South Korea will continue to be banned from reprocessing and enrichment it will be permitted to pursue research into the recycling of spent nuclear fuel rods.

In an otherwise quiet week in the uranium market, four transactions were completed in the spot market totalling 550,000lbs, TradeTech reports. A US utility looking to buy 500,000lbs of U3O8 equivalent for 2018-22 delivery has finalised its evaluation of offers. TradeTech’s term price indicators remain unchanged at US$39.00/lb (mid) and US$46.00/lb (long).

Greg Peel

About Greg Peel

Greg Peel joined Macquarie Bank in 1986 and acquired trading experience in equities, currency, fixed income and commodities derivatives, ultimately being appointed director of equity derivatives trading. He later published In With The Smart Money (a plain English guide to the mysterious world of financial markets and derivatives) and acted as a consultant to boutique investment funds. In 2004 Greg joined FNArena as a contributing writer. He is now a director and principal of the company. Greg compliments the journalistic background of the FNArena team with lengthy experience as a financial markets proprietary trader.

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