• 4 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 9 minutes Australia sues Neoen for lack of power from its Tesla battery
  • 13 minutes NordStream2
  • 7 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 day U.S. Presidential Elections Status - Electoral Votes
  • 2 hours Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 11 hours Evergrande is going Belly Up.
  • 3 days Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 17 hours Is the Republican Party going to perpetuate lies about the 2020 election and attempt to whitewash what happened on January 6th?
  • 3 days Oil Price: does the security vacuum in the Middle East spook investors?
  • 3 days Ozone layer destruction driving global warming
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

Uranium Prices Set To Rise In 2017

Uranium prices have rebounded a little in recent months. With spot rates rising to a current $22.75/lb — after falling as low as $18 in late 2016.

But a new plan from the world’s top producer could help get prices moving upward again. As this major plans to increase its presence in buying and selling uranium around the world.

The firm is Kazakhstan state miner KazAtomProm. Which said this past week that it is setting up its first-ever trading subsidiary, to become more active in setting uranium prices.

KazAtomProm’s commercial director Riaz Rizvi told an industry conference late last week that a trading arm based in Switzerland has now been established. With full staffing for the office expected to be completed by the third quarter of this year.

Director Rizvi noted that after that point, KazAtomProm’s uranium traders will become active in the spot market. A fact that could be very significant for uranium prices.

Here’s why: uranium spot prices generally fall well below long-term prices. As the chart below shows, there’s been an approximately $10 to $20 gap between the two marker prices over the past decade.

 

(Click to enlarge)

Spot uranium prices tend to lag long-term prices by $10 to $20 (source: Cameco)

KazAtomProm sees a big reason for that spread: a lack of trading in the spot market. As Rizvi put it, “The problem is the fact that we are not buying and selling material.” Related: ‘’OPEC Has Failed’’

Rizvi pointed out that in other commodities, long-term prices generally don’t rise much above the cost of storage. If that happens, traders and other market participants simply buy up spot product and keep it, to sell in the future.

KazAtomProm may now be planning to bring such a strategy to uranium. Which could help to narrow the gap between spot and long-term prices — especially given the financial power this big firm has behind it.

That in turn could lead to a significant rise in spot prices. Storage fees for some industry groups runs as little as $0.22/lb yearly — meaning spot rates could rise a lot from the current $10 to $20 discount to long-term, and still offer a profitable arbitrage. Watch for potential changes coming in uranium trade and pricing starting in Q3.

Here’s to stepping into the market.

By Dave Forest

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News