Uranium week: wild month – FNArena

Weekly reports | 12:06

The uranium spot market traded in a wide range in March due to recurring speculation about a possible US ban on Russian uranium exports.

-Uranium not originally included in US sanctions
-Two bills currently in Congress to do just that
– Spot and futures prices increase, as does the estimated cost of production

By Greg Peel

It was a tumultuous March in the uranium markets. When the sanctions were first imposed on Russian exports, it was assumed that uranium would be included, driving the spot price up to US$60.00/lb. When uranium was not included, the price fell back to US$48.50/lb.

But bills proposing a ban on Russian uranium exports to the United States have since been introduced in the Senate and House, driving up the spot price.

U3O8 closed the month at US$58.20/lb according to industry consultant TradeTech’s spot price indicator, which was last Thursday, from US$49.00/lb at the end of February.

On Friday, TradeTech’s weekly spot price indicator had risen to US$59.00/pound, to mark a week-over-week increase of US60c.

Last week, 800,000 pounds of U3O8 equivalent changed hands in six transactions. March saw a total volume of 8.1ml.

While utilities were somewhat engaged in the spot market in March, it was speculative interests that drove prices higher, particularly that of the Sprott Physical Uranium Trust.

During a US Senate Energy Committee hearing last week, Uranium Producers of America Chairman Scott Melbye said the UPA “strongly supports legislation to impose… a ban on Russian uranium imports,” similar to the Biden administration’s ban on imports of Russian oil, natural gas and coal that have been the subject of bipartisan legislative efforts in the Senate and House .

Futures markets

While utilities may have largely stayed away from a volatile spot market, they actively engaged in futures markets in March as they pushed forward with commitments to non-Russian sources of supply to guard against not only a possible ban on uranium exports, but also the difficulty entail financial and other sanctions against Russia.

Eleven transactions totaling 11 mlb of U3O8 equivalent were concluded during the month.

Utilities have picked up equipment over a long delivery period, TradeTech notes, with many pledging to buy through 2032. Others have opted to acquire equipment in the short- and medium-term delivery windows.

Utilities dominated as the top buyers in the futures market in March, but other entities also intervened in the futures market to secure equipment for delivery outside the spot delivery window and extending in some cases over several years.

TradeTech futures market price indicators rose to US$58.00/lb (medium), from US$47.00/lb in February, and US$50.00/lb (long) from 45.25 US$/lb.

TradeTech also increased its estimated average production cost to US$52.00/lb from US$46.60/lb.

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