A jump in the weekly spot price focuses the minds of uranium participants on both short and medium-term price catalysts.
-Increasing short-term transaction volumes
-Bullish 12 month view
-Spot uranium rises over 8% to
The weekly spot uranium price showed renewed volatility this week, spiking 8% to
Industry consultant
Investor interest from funds has undergone a recent resurgence with
In addition, select emerging producers have supplemented this strategy with a "buy and deliver" revenue model, notes
In turn, this could support the potential development of Denison's 90% owned
When taken together, purchases by Denison, UEC, and Yellow Cake in 2021 total 7.8m lbs in a spot market that had seen approximately 15.7m lbs transacted to date this year, calculates
In relation to the medium term, investment banking and financial services company
Discussion centred on a number of catalysts for rising prices over the next 12 months.
A structural shift to emerging nuclear power growth in
Also detailed were the difficulties faced by European countries, such as
As a result of climate change being at the forefront of government policy,
The significant challenges faced by producers is clear with marginal costs well above current spot prices and an absence of long-term contracts at the prices required for economic production. Future supply is considered to look fragile with mines shutting down due to depletion and a lack of investment in new primary mine supply.
The presence of long-term contracts has masked the discord between spot prices and production costs, according to the panelists. However, this is expected to change as utilities re-enter the market in 2021 to re-contract.
With significant supply having already been removed from the market and a slow ability to respond by producers, a tighter environment than over the last decade is expected to arise.
As to why the price should start appreciating soon, it was felt utilities had reached a point where they had no choice but to again recommence large scale contracting.
The world's largest producer and seller of natural uranium, Kazatomprom, released financial results on March16, reporting annual production of 50.6m lbs for 2020, which was -15% lower than 2019 output, due to second quarter actions to protect employees during the pandemic.
Production guidance for 2021 is 58.5-59.3m lbs. The company also noted it may purchase material in the spot market after investor
ASX-listed
The reset of capital structure delivers optionality on future funding structures to restart the Langer Heinrich uranium mine at an estimated cost of US81m, with prudent debt levels.
Uranium pricing
The weekly spot uranium price had exhibited limited volatility recently, steadily declining to
The weekly spot uranium price is nearly 24% higher than a year ago and is down nearly -2.5% in 2021. The average weekly uranium spot price in 2021 is
A total of approximately 3.2m lbs U3O8 was purchased during the week.
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