Uranium Market Outlook - Q2 2018: Uranium Industry Fails to React to Curtailment of Uranium Mining Operations - ResearchAndMarkets.com
Eleven per cent of the world’s energy supply comes from 440 nuclear power plants, with 60 more reactors under construction and another 160 are planned around the world. With the world using more energy per person every decade, and an exponentially growing number of people, the demand for nuclear power will only increase in the decades ahead.
Uranium-produced radiation, moreover, is used to treat cancer, irradiate food against disease, study cells, detect flaws in metals and other structures, and create smoke detectors. Of course, it supplies the fuel for nuclear submarines and weapons, and the material for depleted uranium shells. In short, most of our lives will be shaped, and often saved, by uranium.
With all of these uses, uranium has a complex and rapidly-growing global market, and since 2005 the Uraniumletter International has been one of the world’s finest sources of information for investing in the international uranium equity markets.
In their Market Outlook of December 2017, the author predicted that a narrowing gap between spot- and long-term U3O8 price would be needed to underpin an improving uranium market sentiment.
Since then, Cameco’s shut-down of its McArthur River mine, the world’s largest and highest-grade uranium mining operation and state-owned Kazatomprom of Kazakhstan, with a production of 24,575 tonnes U in 2016 (40% of total world production), the world largest uranium producer, having announced a production cut over a period of 3 years, and further curtailments with other producers not only failed to have a positive effect, but didn’t stop the ongoing weakness of the spot price, which declined from US$ 23.75/lb at year-end 2017 to a current price of S$ 21.00.
Nevertheless, industry experts stick to their belief that a recovery of the uranium prices is just a question of time, thereby pointing at the fundamentals remaining largely unchanged and the projection that there are approximately 12 billion pounds utilities between 2018 and 2030, as stated by Denison Mines in a letter to its shareholders dated March 31, 2018.
With the spot price having recovered from US$ 20.25 at year-end 2016 to an interim high of US$ 26.50 on December 4, 2017, the spot price fell back to the current level of US$ 21.00, while the long-term price remained stable at a level around US$ 30.00 (currently US$ 29.00).
So, the big question is why at a depressed spot price there is no forward buying by utilities to narrow the US$ 8 gap with the long-term price.
In this respect, it should be recognised that due to of the shift in economic world order most of future growth in uranium demand, in particular from China, Russia and India, will be provided by a surplus in supply from strategic blocks, rather than through the open market.
Key Topics CoveredShift in economic world order will have crucial impact on the uranium marketWorldwide nuclear capacity continues to grow in 2016; WNA targets nuclear energy to provide up to 25% of total electricity in 2050United Nations change report calls for World action on carbon emissions and leaves nuclear power as the only mature sourceParis Climate Agreement confirms essential contribution of nuclear energy as the only large-scale source to limit global warmingUSA accounts for more than 30% of worldwide nuclear power generation of electricityFossil fuels remain to have most influence on Trump’s energy policyCall for US government to revitalize its nuclear industryEnergy Fuels and Ur-Energy jointly file a petition with the U.S. Commerce Department to investigate effects of uranium imports on U.S. national energyUS Congress approves US$ 1.2 billion budget for nuclear energyWith 27% of electricity produced from nuclear energy, Europe remains important component of the EU’s energy mix in the 2050 horizonNuclear phase out in Germany in conflict with EU energy strategyEuropean energy targets are out of reachChina to dominate future global nuclear power market, including expansion abroadAiming to supply 25% of electricity from nuclear power by 2050, India plans to tenfold uranium output growthMiddle East nuclear power to quadruple in ten yearsOther countries to be in favour of nuclear energy
Companies FeaturedCNNC InternationalCamecoChina Nuclear CorporationDenison MinesEnergy FuelsKazatompromUr-EnergyUranium One
For more information about this report visit https://www.researchandmarkets.com/research/8c3rvh/uranium_market?w=4
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INDUSTRY KEYWORD: NATURAL RESOURCES MINING/MINERALS
SOURCE: Research and Markets
Copyright Business Wire 2018.
PUB: 11/14/2018 04:48 AM/DISC: 11/14/2018 04:48 AM