June 30, 2010

Good News Uranium Spot Rises +$1.00

Weekly Spot Ux U3O8 Price
as of June 28, 2010

U3O8 Price (lb) $41.75 [+1.00]

June 29, 2010


It would appear that China has emerged as the potential savior of uranium prices this month. Industry consultant TradeTech notes how buyers have taken the view that spot U3O8 prices have probably seen their bottom this year and that higher prices from here onwards should be expected.

The switch in market view appears to have come on the back of indications that Chinese buyers are seeking to secure long term supply contracts. The Chinese market emergence comes at a time when the US Department of Energy (DOE) has again entered the market to sell the final lot of inventory being sold in 2010 to fund cleanup efforts at the Portsmouth enrichment facility.

In the past, whenever the DOE offered uranium for sale, prices and overall market activity have tended to weaken.

The DOE is inviting bids for just over 250,000 tonnes of uranium in the form of UF6. TradeTech reports bids are due no later than July 2, with delivery to occur on August 6, 2010.

TradeTech estimates over 500,000 tonnes in uranium equivalent changed ownership last week and a further 200,000 is expected to have changed hands on Monday or Tuesday.

The uptick in overall market activity has caused a minor rise in the consultant's weekly spot price indicator; from US$40.75 to US$41/lb (up US25c).

TradeTech's mid-term price indicator has remained unchanged at US$50/lb, its longer-term indicator has remained at US$60/lb.

By Rudi Filapek-Vandyck

June 27, 2010


The spot price of uranium remained at $40.75 a pound U3O8 in the past week, according to price publishers TradeTech and Ux Consulting. But there are growing signs that a number of large utilities in Asia and Europe are poised to enter the medium- and long-term markets for substantial quantities of uranium, several market sources said. That activity should result in a major move up in the medium- and long-term prices, said one analyst, adding that spot prices will likely follow suit.

But for now, the spot market seems to be caught up in the summer doldrums, TradeTech said late Friday. Buying interest is lackluster at best, and all demand is discretionary, the company added. UxC late Monday added that prices in several recent deals for delivery at the end of 2010 and in the first half of 2011 have reportedly contained prices higher than the current spot indicator. But a more bearish seller said he expects the spot price to remain weak for quite a few months.

He added that to attract buyers in today's market, one would have to make an offer much closer to $40/lb. UxCs broker average price was $40.76/lb on June 21, up slightly from the $40.71/lb BAP on June 14. The BAP is a daily calculated midpoint of the bids and offers reported by three brokers -- ICAP, Tullett Prebon, and MF Global, according to UxC. In the long-term market, TradeTech kept its price at $60/lb U3O8 at the end of May, while UxC kept its long-term price at $58/lb. Market analysts and price publishers often have slightly different definitions of spot and long-term deliveries, but spot-market deliveries typically occur within about three to four months (but can sometimes stretch out to 12 months); long-term deliveries are multi-year deliveries that start typically start 18-24 months in the future (but can sometimes start as soon as 13 months out). TradeTech's monthly mid-term price remained at $50/lb at the end of May. TradeTech defines this mid-term price as applying to deliveries that begin immediately beyond the 12-month spot delivery window and that occur within one to two years from that point either as stand-alone agreements or as part of a long-term contract.

In a report sent to clients last week, Washington-based consultant Energy Resources International said it expects the long- term uranium price to decline further this year and possibly into next year. ERI said that under its reference case for nuclear power growth (uranium requirements to rise from 171 million lb U3O8 per year as of 2010 to 265 million lb per year in 2030), the long-term base price for uranium is projected to remain at about $50/lb through 2015. That price would gradually rise to about $74/lb in 2025, the ERI report said.

June 18, 2010


Despite the safety and security risks involved, nuclear energy just might be the way to combat climate change, according to the International Energy Agency (IEA) and OECD Nuclear Energy Agency (NEA).

The two agencies unveiled a nuclear roadmap on Wednesday, declaring that nuclear energy has the potential to make a major contribution to reducing greenhouse gas emissions.

``Nuclear energy is one of the key low-carbon energy technologies that can contribute, alongside energy efficiency, renewable energies and carbon capture and storage, to the decarbonization of electricity supply by 2050,'' said Nobuo Tanaka, IEA executive director, during the East Asia Climate Forum, at the Shilla Hotel, Wednesday.

The use of nuclear energy to generate electricity started in the 1960s and grew rapidly in the 1970s and 1980s. But nuclear capacity stagnated (except for Japan and Korea), after high-profile accidents in Chernobyl and Three Mile Island exacerbated concerns about its safety and the high cost of building nuclear power plants.

The new nuclear roadmap noted that current nuclear energy technology has incorporated lessons from past experiences, plus advanced technology that enhances safety and performance.

Nuclear power is seen as a mature low-carbon technology that is ready for wider deployment around the world.

In line with the IEA scenario for a 50 percent cut in energy-related CO2 emissions by 2050, the roadmap sees nuclear capacity growing to 1,200 gigawatts electrical (GWe), providing nearly 24 percent of the world's electricity.

At present, nuclear generating capacity is 370 GWe, representing 14 percent of global electricity.

This ``nuclear renaissance,'' Tanaka admitted, would have to overcome numerous policy, industrial, financial and public acceptance obstacles.

First of all, political support and public acceptance are keys to a successful nuclear energy policy. Stable government policies should be established, as well as legal and regulatory frameworks.

``The government can help reduce the risk of nuclear power by providing discounts. Then it can become more competitive. If possible, it can place higher carbon prices on gas, so the prices of wind and nuclear energy would be more competitive. The government can change the competitiveness of different electricity sources by changing the carbon prices,'' Tanaka said.

One of the biggest challenges is financing. Large initial investments are needed to build nuclear power plants, which would require international collaboration. The IEA estimates a total investment of $4 trillion is necessary from 2010 to 2050 worldwide, including $893 billion in China and $883 billion in the U.S. and Canada.

Safety is also a big concern, which is why it is important to make progress in implementing plans for permanent disposal of radioactive waste.

``We need to have tight conditions on disposal of high-level wastes, non-proliferation and safety, in order to push for nuclear energy in the future,'' he said.

If more countries start using nuclear energy, there are worries that the technology and materials will be used for non-peaceful purposes. To address these concerns, the roadmap suggests more appropriate non-proliferation controls and stronger international cooperation in non-proliferation, nuclear law and physical protection of nuclear facilities and materials.

Despite these challenges, Tanaka believes the benefits of nuclear energy far outweigh the risks. ``The benefits of nuclear power are obvious _ it is very cheap and low-carbon. To achieve a low-carbon society, nuclear energy is a very important part of the solution,'' he said.

Korea has developed a strong nuclear industry, with nuclear energy accounting for about 35 percent of its total electricity as of 2009. Among OECD countries, Korea has the largest nuclear expansion underway with six units under construction as of the end of 2009.


June 8, 2010


8th JUNE - 2010

Two transactions have been registered by industry consultant TradeTech in the uranium spot market during the week ending on Friday. Both transactions combined totaled less than 600,000 pounds U3O8 equivalent and the prices agreed to by buyers and sellers must have been close to US$40.75/lb as TradeTech decided to leave its weekly spot price indicator unchanged.

The consultant remarks overall demand remains highly discretionary and both sellers as buyers seem somewhat reluctant to genuinely commit.

TradeTech's spot price indicator at US$40.75/lb compares with the consultant's equally unchanged mid-term price indicator of US$50/lb and its equally unchanged longer-term price benchmark of US$60/lb.

Given the carnage elsewhere in the commodities complex, it's probably a relief to participants in the uranium sector that prices are holding up.

8/06/2010 5:15:02 PM

By Rudi Filapek-Vandyck