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August 26, 2016 - The path to full resumption of nuclear operations in Japan continues to encounter roadblocks. Just last week, Shikoku Electric Power Co. reconnected its Ikata Unit 3 plant (846 MWe PWR) to the grid, which is expected to return to commercial service as early as September 7. Operation of Unit 3 resumes five years and three months after it was shut down for a periodic inspection in April 2011. The restart of Ikata Unit 3 brings the number of Japanese reactors approved for operation to five. Yet today, the recently elected governor of Japan’s Kagoshima prefecture requested that Kyushu Electric Power Co. temporarily suspend operation of its Sendai Unit 1 and Unit 2 (846 MWe PWRs). Sendai Unit 1 was the first reactor to be restarted last August, while  Unit 2 resumed operation in October. Takahama Units 3 and 4 (830 MWe PWRs) remain offline due to a court injunction. Sendai 1 and 2 are currently scheduled to be taken offline for routine maintenance in October and December, respectively.
In the UK, uncertainty continues to surround the future of the planned Hinkley Point C project. Prime Minister Theresa May decided to delay approval of the UK’s first new nuclear power plant in three decades after the country’s vote in June to leave the European Union. UK government officials are reportedly exploring how the UK might withdraw from the deal while minimizing financial risk and damage to its relations with China, which is committed to investing billions of pounds into the proposed project. Although the Hinkley Point Project has stalled, CGN Power Co., China’s largest nuclear power operator, did post a 3.4 percent increase in profit for the first half of the year on higher power generation, overcoming a slowdown in an industry where demand growth is slipping amid a slowing economy.
On the supply side, uranium miner Paladin Energy narrowed its full-year loss as it focuses on cutting costs amid lower uranium spot prices. The miner reported a net loss attributable to members of US$122 million for the year ended June 30, markedly better than the $267.8 million loss it posted in the previous year. Paladin said its C1 production costs fell to a record low of $25.88 per pound for the year, and it expects costs to fall even lower during the year ahead.
The company cited falling uranium prices for the decision to lower production. Paladin is working on a proposed plan to reduce mining and mill throughput at the Langer Heinrich Uranium Mine in Namibia, with processing plant feed coming from stockpiled low- and medium-grade ores. The change will reduce U3O8 output by 1 to 1.5 million pounds per year over the next two years. However, Paladin said the requirement for less movement of mined material on site during the period reduced cash operating costs more than any lost revenue.
The spot uranium market was slightly more active than last week with five transactions concluded this week. Buyers remain hesitant to commit to significant purchases, although a few did venture into the market hoping to see lower prices. Sellers, however, generally held firm with offers exhibiting little willingness to lower prices. Traders and financial entities were responsible for the bulk of the purchasing, while traders and producers acted as sellers.
TradeTech’s Weekly U3O8 Spot Price Indicator remains at $25.75 per pound U3O8, unchanged from last week’s Indicator and unchanged from the August 25 Daily U3O8 Spot Price Indicator. read more