• 4 minutes End of Sanction Waivers
  • 8 minutes Balancing Act---Sanctions, Venezuela, Trade War and Demand
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 14 minutes What Would Happen If the World Ran Out of Crude Oil?
  • 7 hours Saudi Arabia Says To Coordinate With Other Producers To Ensure Adequate Oil Supply
  • 30 mins US Military Spends at least $81 Billion Protecting OPEC Persian Gulf Oil Shipping Lanes (16% DoD Budget)
  • 10 hours Alliances: Iran And Pakistan To Form Joint Rapid Reaction Force At Border
  • 4 hours Overheating the Earth: High Temperatures Shortened Alaska’s Winter Weather
  • 4 hours Populist Surge Coming in Europe's May Election
  • 1 hour "Undeniable" Shale Slowdown?
  • 4 hours Climate Change Protests
  • 4 hours China To Promote Using Wind Energy To Power Heating
  • 2 hours Gas Flaring
  • 1 hour Don't Climb Onto the $80+ Oil Price Greed Roller Coaster, Please.
  • 1 hour How many drilling sites are left in the Permian?
  • 2 hours O&G now in the Magical Goldilocks Zone of $70 Brent
Alt Text

The Middle East Nuclear Race Is Reaching A Boiling Point

As geopolitical tension continues to…

Alt Text

Nuclear Is Not A Catch-All Solution To Climate Change

Though many pundits and analysts…

Alt Text

Uzbekistan, Russia Announce Joint Nuclear Facility

Uzbekistan and Russia have struck…

Dave Forest

Dave Forest

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

More Info

Trending Discussions

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

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News