SPECIAL REPORT | URANIUM PRICING
Nonetheless, Russian nuclear energy analysts believe that even given the final approval of the bill will not lead to a radical change in the global uranium market. For instance, Boris Martsinkevich, chief editor of the
Russian Geoenergetics portal reportedly said in a recent interview with the Russian Rossyiskaya Gazeta business paper, that even if sanctions are imposed on Rosatom, the company still has long-term contracts with American companies that consume uranium, many of which were signed 10 years ago. According to him, there are about two dozen companies in the United States that buy Russian uranium. As he says: “They are all private and it is difficult to predict how they will behave.” Nevertheless, according to his calculations, the roughly
52,000 tonnes of uranium reserves currently accumulated by the United States will last for about three years. In Europe, reserves there will be enough for around two years. As for Russia, Martsinkevich argues that existing long-term contracts will allow the country to stay afloat in the global uranium market. Currently Rosatom ranks first in the world in terms of uranium enrichment with some 35% of global capacity and is also second in uranium production at 14%, and third in fuel production with 17%. According to Alexander Timofeev, Associate Professor of
the Department of Informatics of the Russian Plekhanov Economic University, the current high demand for uranium will actually prevent the West from imposing sanctions in order to maintain supply at the current price. In 2023, Russia and Kazakhstan supplied uranium worth around US$1 billion to the US alone. And, as Timofeev also added, many consumers currently want to tie in suppliers and fix low prices with long-term contracts.
A real market shift? In the meantime, some analysts also believe that the current growth in spot market prices cannot necessarily be taken as a strong indicator of overall market conditions. According to Boris Sinitsyn, a well-known Russian expert in
the field of nuclear energy, in 2023 the spot market activity declined significantly due to active contracting in previous years. Thus, on average over the last roughly nine months, less than 20% of global uranium trade came through spot market transactions. This is in stark contrast to the previous five years, when the spot market share of trade exceeded 50%. In 2023, uranium supplies under long-term contracts also continued to grow, which pushed up long-term prices while last year also saw increases in prices for U3
O8
processing. Still, despite this, analysts do not expect to see further
sharp growth in uranium prices this year. This is due to the existence of some spare production capacity, in particular in Kazakhstan and the world’s largest uranium producer Kazatomprom. Its costs for uranium mining are still many times lower than the current price although it is currently experiencing some problems reaching its stated production targets. Indeed, the company recently warned it likely won’t be able to meet production targets over the next two years mainly due to a shortage of sulfuric acid and delays in completing construction work at new mines. The company also previously highlighted risks associated with increased production due to global supply chain challenges and limited access to certain key materials and reagents.
Capacity uptick on the cards Gwénaël Thomas, an official spokesman of Orano told NEI that there are several factors, which lead to the ongoing growth of uranium prices, saying: “The reason for the increase in uranium prices is certainly multifactorial. One of the main factors for this increase is the anticipation of growth in uranium demand in the years to come. This anticipation is part of a more favourable context for the development of nuclear energy, marked by several announcements of new projects for the construction of reactors or the extension of existing facilities in many countries.”
Above: Negative impacts on the supply of uranium ore have seen prices jump sharply over the last year 46 | April 2024 |
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