As the uranium spot price rose 3.8% for the week, share prices of current and prospective uranium producers rose solidly
-Uranium equities outperform most indices
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-Uranium spot price rise by 3.8% for the week
Share prices of current and prospective uranium producers rose solidly last week. A contributing factor was the announcement by Sprott Asset Management and physical uranium investment vehicle
Investment managers
Those additional purchases may put pressure on spot prices and cause an increase in term contract pricing. In addition, it potentially establishes a mechanism for daily commodity price discovery by speculators, explains Shaw.
In further news, UPC announced last week an upsizing by around
Some share price rises last week for uranium companies covered by
In production news, both Cameco Corporation and Kazatomprom released first quarter operating results last week.
First quarter results were driven by normal quarterly variations in contract deliveries, explains industry consultant
Despite this the company ended the quarter with over a billion dollars in cash and was successful in adding 9mlbs U3O8 to the long-term contract portfolio.
The company has increased the outlook for purchasing uranium this year to meet its delivery commitments and to maintain a working inventory. It now expects to acquire 11-13mlbs of uranium this year, compared with previous plans to purchase 8-10mlbs, with additional purchases possible, depending on
Kazakh uranium producer Kazatomprom reported production of 12.8mlbs for the first quarter, 7.3mlbs on an attributable basis, down -6% compared to the same period last year. This was due mainly to the company's decreased wellfield development activity and lower staff levels throughout the second quarter of 2020.
Group sales volume totalled 3.3mlbs for the first quarter, at an average realised price of
Although first quarter production was lower year-over-year, due to the impact of lower wellfield development in the second quarter of 2020, Kazatomprom expects production rates to recover in the second half of 2021.
Nuclear Waste
The world's first repository for used fuel is expected to begin operations in the mid-2020's. Excavation of the first final disposal tunnel has started at the Onkalo underground used nuclear fuel repository in
It's is estimated that 100 deposition tunnels will be excavated during the 100-year operational period of the final disposal facility, and will have a total length of about 35 kilometres. Used nuclear fuel will be placed in the bedrock at a depth of about 450 metres.
The excavation of the first five tunnels is part of Finnish radioactive waste management company Posiva Oy approximately US$607m EKA project that covers all the final disposal facilities needed.
Posiva's plan is for used fuel to be packed inside copper and steel canisters at an above-ground encapsulation plant. About 30 canisters will be placed in each tunnel. A similar repository is planned at Forsmark in
Uranium pricing
While the spot price has risen over 9% in the last two months, gaining an average of nearly 1% per week, the Spot Price Indicator is down -0.5% in 2021. The average Weekly Spot Price Indicator in 2021 is
A total of approximately 1.6mlbs U3O8 equivalent traded hands over the course of the week, primarily to trader and financial entity buyers. The bulk of the volume picked up this week was purchased early in the week, following the news that both
Additionally, spot prices rose on reports the
One element reshaping both the spot and term markets is increased buying by the production sector. In March, producers moved into the spot market to buy uranium, which led traders, end-users, and other entities to follow suit. Buying by prospective producers presents a new avenue for project financing, while the loss of legacy contracts places greater pressure on existing producers. For now, both existing and prospective producers are utilising spot purchases dispatched into future deliveries as means to provide revenue for operations until the market improves and term contracting activity picks up.
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