Uranium Week: Fighting Low Prices

Weekly reports | 11:08

As the spot price of uranium rose 2% for the week and 9% for the month, an EIA report found the lowest price paid since 2007 by owners and operators of commercial nuclear power plants. American.

-EIA report reveals price paid in 2020 by owners and operators of US civil reactors
-United Kingdom introduces legislation to develop nuclear energy
-Kazatomprom publishes -79% lower revenue in the first quarter
-The spot price of uranium increased by 2% for the week

By Mark Woodruff

The US Energy Information Administration (EIA) last week released its 2020 annual report on uranium marketing in the United States and its 2020 national uranium production report.

Despite power markets bouncing in 2020, reports indicate that nuclear power is a fundamental source of baseline power generation (20%) with capacity factors stable at 94%, Canaccord Genuity explains. The broker believes that hedging future demand will continue to drive a more active futures market in 2021.

The EIA is responsible for collecting, analyzing and disseminating energy information to inform the development of effective policies and markets. It also allows the public to better understand energy and its interaction with the economy and the environment.

Reports released in 2020 quantify developments in the uranium industry in the United States, including declining inventories, says industry consultant TradeTech. They also showed a high aggregate contractual coverage rate among owners and operators of US civilian nuclear reactors. In addition, lower weighted average uranium prices and historically low uranium production have been reported.

The annual report on the marketing of uranium showed that owners and operators of US commercial nuclear power plants in 2020 purchased nearly 49 ml of uranium from US and foreign suppliers. These trades were carried out at a weighted average price of US $ 33.27 / lb, which represents a 1% increase in volume and a -7% decrease in price compared to 2019 data. The weighted average price is the lowest price paid by owners and operators of U.S. civil reactors since 2007.

Of the deliveries to the United States, 76% were made under longer-term contracts, with an average value of US $ 34.74 / lb. As Canaccord points out, it’s always darker before dawn, with prices not representing the marginal cost of production let alone the incentive price for restarts or new development.

In 2020, 11.7 mlbs or 24% of sales were in cash, compared to 10.5 mlbs in 2019 and the highest since 2014. This illustrates that long-term contracts signed after Fukushima (2011-2015) are starting to expire, Canaccord explains.

The report showed that uranium of Australian and Canadian origin combined accounted for 42% of the volumes reported by country of origin. Uranium purchased by US civilian reactor owners and operators from Russia was once again the lowest weighted average price paid at US $ 25.73 / lb, while purchases in Australia occupied the highest cost position. high at US $ 39.86 / lb.

US and UK government support for nuclear power

The Biden administration’s support for the US nuclear industry was again evident last week. White House National Climate Advisor Gina McCarthy said existing nuclear power plants will be needed in the administration’s effort to meet greenhouse gas emission reduction targets. “In many areas, the continuation of existing nuclear power, as long as it is environmentally friendly and authorized, will be absolutely essential.” Indeed, it will give time to develop renewable energy into a larger part of the energy mix, McCarthy said at a virtual event at the Columbia University Center on Global Energy Policy on May 18.

The British government announced last week that it introduce legislation to further engage in the development of national nuclear energy. Kwasi Kwarteng, Secretary of State for Business, Energy and Industrial Strategy, made the statement in the House of Commons.

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