• 3 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 7 minutes Saudi and UAE pressure to get US support for Oil quotas is reportedly on..
  • 11 minutes China devalues currency to lower prices to address new tariffs. But doesn't help. Here is why. . . .
  • 15 minutes What is your current outlook as a day trader for WTI
  • 4 hours Domino Effect: Rashida Tlaib Rejects Israel's Offer For 'Humanitarian' Visit To West Bank
  • 5 hours In The Bright Of New Administration Rules: Immigrants as Economic Contributors
  • 5 hours Will Uncle Sam Step Up and Cut Production
  • 3 hours Gretta Thunbergs zero carbon voyage carbon foot print of carbon fibre manufacture
  • 4 hours Continental Resource's Hamm wants shale to cut production. . . He can't compete with peers.
  • 7 hours Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 1 day US Petroleum Demand Strongest Since 2007
  • 9 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 1 day Movie Script: Epstein Guards Suspected Of Falsifying Logs
  • 17 hours Significant: Boeing Delays Delivery Of Ultra-Long-Range Version Of 777X
  • 17 hours Why Oil is Falling (including conspiracy theories and other fun stuff)
  • 23 hours Strait Of Hormuz As a Breakpoint: Germany Not Taking Part In U.S. Naval Mission
Alt Text

Nuclear Fusion Could Be A Reality By 2025

As carbon emissions continue to…

Alt Text

Another Nuclear Megaproject Bites The Dust

Toshiba, the troubled Japanese electrical…

Alt Text

Why Is China Losing Interest In Nuclear Power?

China once had tremendous nuclear…

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




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play