Jan 13 Uranium week: Tension rising, but not price

Weekly Reports |Jan 14 2020

Rising tensions between the USA and Iran have not prevented spot uranium from sliding further in early 2020.

-Spot uranium continues to slide as buyers stay on the sidelines-Renewed sanctions on Iran do not specifically target the country's nuclear program-Several utilities assessing options in term market

By Rudi Filapek-Vandyck

There is no stopping the slide in spot uranium, or so it appears, with industry consultant TradeTech's spot price indicator losing a further -US25c to US$24.60 during the week ending January 10, 2020.

Spot transactions totalled 300,000 pounds U3O8 divided over three separate transactions. TradeTech reports the absence of any heightened end-user buying is the main culprit for the ongoing subdued conditions for the yellow cake industry.

The opening week of the fresh calendar year did not see any participation from utilities, but TradeTech reports several are watching activity closely while preparing to enter the market once market and political uncertainties are resolved.

USA-Iran Uncertainty Rising

The Trump administration in the US did levy additional sanctions on Iran, as part of renewed escalation in tension between the two countries, but thus far the new penalties do not include specific sanctions related to Iran's nuclear program.

This, however, does not negate the fact that overall uncertainty has once again risen for the global uranium industry. Thus far, the rise in tension and uncertainty has merely kept buyers on the sidelines, at least for now.

TradeTech's mid-term price indicator has remained at US29/lb (last decline in late December) while the long-term price indicator is similarly unchanged from late December, at US$33/lb.

Term Market Activities

In the term market, TradeTech reports, one US utility continues to evaluate offers for circa 650,000 pounds U3O8 equivalent for delivery between 2020 and 2022.

A non-US utility is in negotiation with a preferred supplier for 400 tU3O8 (~880,000 pounds U3O8) for delivery in 2020. Another non-US utility is seeking offers for 150 tU3O8 (~330,000 pounds U3O8) for delivery in 2021; offers are due on January 20.

Offers are due January 15, to a non-US utility requesting offers for 2.2m pounds U3O8 with delivery between 2021 and 2026, with an option for delivery in 2027 and 2028. Another non-US utility is finalising its selection of a preferred supplier for approximately 3m pounds U3O8 equivalent contained in UF6 or enriched uranium product (EUP) for delivery over the 2022-2028 period.

Another non-US utility is seeking offers for 250 tU3O8 (~550,000 pounds U3O8) to be delivered beginning in 2025 and extending to 2030.

In addition to these formal requests, several utilities remain engaged in off-market discussions with potential suppliers to secure material for mid-term deliveries. Others remain engaged in off-market discussions with potential suppliers regarding mid- and longer-term commitments.

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