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Press Releases

April 27, 2010 – TradeTech Forecasts Primary Supply Gap in Uranium Conversion Market: TradeTech Report: Uranium Conversion 2010
January 1, 2010 – Uranium Market Poised for Recovery in 2010: TradeTech Year-End Spot Price Settles at US$44.50
November 20, 2009 – TradeTech Examines Market Impact of DOE Uranium Disposition to Fund Portsmouth Project
November 6, 2009 – China Seeks Uranium Supplies for Nuclear Power Growth
September 30, 2009 – TradeTech Announces New Headquarters Office
July 2, 2009 – TradeTech Introduces Mid-Term Uranium Price Indicator
January 2, 2009 – TradeTech Uranium Spot Price Declines in 2008—Year-end Price Settles at $52
November 5, 2008 – Uranium Spot Price Fades Amid Global Financial Crisis
September 30, 2008 – Uranium Enrichment Expands in the USA: Centrifuge Technology Leads the Way
January 4, 2008 – TradeTech Uranium Spot Price Reaches Record High in 2007—Year-end Price Settles at $89
November 2, 2007 – TradeTech Uranium Price Continues to Strengthen
October 15, 2007 – TradeTech Uranium Price Rebounds
May 5, 2007 - TradeTech Uranium Price Climbs to Record High
October 20, 2006 – TradeTech and Spectron Energy Inc. Announce Business Alliance
March 31, 2006 – Uranium Enrichment—What’s Driving Prices Higher?
March 10, 2006 – Uranium Price Reaches $40 – Can the Market Sustain this Landmark Price?

TradeTech Forecasts Primary Supply Gap in Uranium Conversion Market: TradeTech Report: Uranium Conversion 2010
Denver, CO, April 27, 2010—Uranium conversion production capacity is adequate for today’s global requirements, but a supply gap exists as primary conversion production has lagged below target levels in recent years. While secondary supplies are currently adequate to fill this gap, there is an imbalance within the Western market between deliveries in North America versus the European Union. Transportation of uranium hexafluoride UF6 will continue to be required to address this imbalance, according to industry analyst TradeTech’s Uranium Conversion 2010 report.

“The regional hot spot for growth in uranium conversion requirements is the Asian market. “China dominates the conversion requirements growth picture with four times more growth than the next country, the USA. In fact, three of the top five countries in conversion requirements growth are in the Asian Pacific Rim region,” said TradeTech President Treva Klingbiel.

“Spot prices for uranium conversion declined after the 2006 peak, due to an abundance of spot supply and limited spot demand, and dropped dramatically over the last year on the US Department of Energy’s (DOE) announcement to release UF6 inventory into the market,” Klingbiel stated.

TradeTech’s Uranium Conversion 2010 provides an in-depth analysis of this evolving market, which involves an important step in the nuclear fuel cycle. The report includes current market activity, supplier profiles, market demand and cost trends, cost variations for the North American and European markets, as well as world supply, demand, and price forecasts. For further information on this report, please contact TradeTech at info@tradetech.com, with your full name, company name, title, telephone number, and e-mail address. [top]

(Editor’s Note: Uranium conversion is one step in the front end of the nuclear fuel cycle that involves a chemical process that converts uranium oxide (U3O8) into uranium hexafluoride (UF6). Conversion is a necessary feature for the next step within the nuclear fuel cycle, which is uranium enrichment.)

About TradeTech
TradeTech, and its predecessor companies–NUEXCO Information Services, CONCORD Information Services, and CONCORD Trading Company–has supported the uranium and nuclear fuel cycle industry for more than 40 years, and is widely recognized for its expertise in trading activities and its comprehensive knowledge of the technical, economic, and political factors affecting this industry. TradeTech provides expert market consulting, participates in the buying and selling of uranium products and services, and maintains an extensive information database on these industries.

TradeTech publishes the Nuclear Market Review (NMR) each Friday evening, which reports the weekly uranium spot market price, uranium trading activity, industry news, and market data. The monthly edition of the NMR, published on the last day of each month, includes TradeTech Market Values (Exchange Value, UF6 Value, Loan Rate, Conversion Value, SWU Value, and Transaction Value) and Mid- and Long-Term Price Indicators, as well as analysis related to these price determinations, supply/demand information, and industry news. TradeTech also publishes The Nuclear Review, a monthly trade publication dedicated to the international uranium and nuclear energy industry.

For general and media inquiries contact:
TradeTech
Denver Tech Center
7887 E. Belleview Avenue
Suite 888
Englewood, CO 80111
Phone: +1 (303) 573-3530
Fax: +1 (303) 573-3531
info@tradetech.com
http://www.uranium.info

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Uranium Market Poised for Recovery in 2010: TradeTech Year-End Spot Price Settles at US$44.50
Denver, CO, January 1, 2010—A declining trend in uranium prices that began in 2008 continued into 2009, as TradeTech’s uranium spot price fell 15 percent from US$52.00 per pound uranium oxide (U3O8) at year-end 2008 to $44.50 on December 31, 2009.

The uranium market attempted to recover from the effects of a global financial crisis that began in late 2008, and the spot price strengthened by mid-year. However, this trend was short-lived as several sellers competed aggressively to conclude sales and the spot price fell again in the second half of the year.

In early October, the spot price climbed briefly as BHP Billiton reported damage to the main shaft of its Olympic Dam that would take months to repair. The company declared force majeure on certain uranium deliveries, which brought a number of buyers, primarily traders and financial entities, to the market and the price rose to $50.00 per pound U3O8. By December, however, the spot price retreated as the US Department of Energy’s sale of uranium to fund cleanup of the Portsmouth uranium enrichment facility overshadowed the market.

The drop in spot prices in the second half of 2009 caused lower expectations of market participants, especially among buyers. “The psychological effect of decreasing prices led many utilities to relax purchasing plans and turn away attractive offers in the expectation of further price declines. While 2009 was a relatively active year for term contracting, a substantial number of utilities, particularly in the USA, continue to wait in hopes of catching the market at the absolute bottom before securing supplies for the longer term,” said TradeTech President Treva Klingbiel.

“Buyers are expected to return to the market during the first quarter of 2010 as a number of utilities have indicated they can justify discretionary purchases for inventory at current price levels,” Klingbiel added. In addition, buying from Asia is expected to remain strong as India and China, in particular, forge ahead with plans for expanded nuclear energy programs to meet rising energy demand. [top]

TradeTech publishes the Nuclear Market Review (NMR) each Friday evening, which includes TradeTech’s weekly uranium spot price, uranium trading activity, industry news, and market data. TradeTech also publishes The Nuclear Review, a monthly trade publication dedicated to the international uranium and nuclear energy industry.

TradeTech, along with its predecessor companies—NUEXCO Information Services, CONCORD Information Services, and CONCORD Trading Company—has supported the uranium and nuclear fuel cycle industry for more than 35 years, and is widely recognized for its expertise in trading activities and its comprehensive knowledge of the technical, economic, and political factors affecting this industry. TradeTech provides independent market consulting and services, and maintains an extensive information database on these industries.

For general and media inquiries contact:

TradeTech

7887 E. Belleview Avenue

Suite 888

Englewood, CO 80111
Phone: +1 (303) 573-3530
Fax: +1 (303) 573-3531
info@tradetech.com
http://www.uranium.info

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TradeTech Examines Market Impact of DOE Uranium Disposition to Fund Portsmouth Project
Denver, CO, November 20, 2009—An internal study by nuclear fuel consultant TradeTech has analyzed the market impact of the US Department of Energy’s (DOE) recent decision to dispose of excess uranium to fund decontamination and decommissioning (D&D) activities at the Portsmouth uranium enrichment facility in Ohio.

Under a recent Secretarial Determination, DOE’s Office of Environmental Management will be able to transfer up to 300 tonnes of uranium (780,000 pounds uranium oxide [U3O8]) quarterly in calendar years 2009 and 2010 for D&D cleanup at the Portsmouth enrichment facility, so long as the total transfer during that period does not exceed 1,125 tonnes of uranium (2.9 million pounds U3O8).

“For this study, TradeTech relied on its standard short-term uranium price model to project spot prices with and without the D&D transfer program. It is important to note that analysis of active supply and demand data shows that price is more sensitive to variations in active supply than to the same level of variation in active demand,” said Dr. R. Gene Clark, TradeTech Chief Executive Officer.

TradeTech assumes for this study that USEC, which leases and operates the Portsmouth facility from the US government, or any other D&D contractor sells the transferred uranium in one spot market action per quarter, and that this uranium is added to the projected values of our active supply for the last month in each quarter, beginning in December 2009. “The resulting impact is a drop of about US$4 per pound U3O8 in the average spot price for 2010 and a decrease of about $7 per pound U3O8 in 2011, compared to prices projected in the absence of this program. In percentage terms, the uranium spot price drops 8% and 14% in 2010 and 2011, respectively,” Clark stated.

TradeTech’s analysis considers only the uranium disposition for the D&D program, as the other parts of DOE’s disposition program were already included in our base analysis.

Note to Editors: Secretary Steven Chu announced on November 12, that the US Department of Energy determined the proposed uranium transfer to fund accelerated D&D activities at the Portsmouth site “will not have an adverse material impact on the domestic uranium mining, conversion, or enrichment industries” (http://nuclear.gov/pdfFiles/Secretarial_Determination111009.pdf). TradeTech’s short-term uranium price model is based on the historical relationship that spot price has to TradeTech’s reported Active Supply and Active Demand, published monthly in the Nuclear Market Review. [top]

TradeTech

7887 E. Belleview Avenue

Suite 888

Englewood, CO 80111
Phone: +1 (303) 573-3530
Fax: +1 (303) 573-3531
info@tradetech.com
http://www.uranium.info

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China Seeks Uranium Supplies for Nuclear Power Growth
Denver, CO, November 6, 2009—China is today pursuing the acquisition of nuclear generating and fuel processing technology as it plans an aggressive nuclear energy expansion plan. Its domestic uranium resources, however, fall short of the forecast requirements needed to fuel commercial reactors slated for construction over the next two decades, Dr. R. Gene Clark, chief executive officer of TradeTech, explained in a recent presentation to the Nuclear Industry Congress in Shanghai, China.

“China’s currently identified domestic uranium resources are not sufficient to meet future demand, which has led the country’s nuclear industry to pursue foreign sources of uranium through exploration and production joint ventures. In addition to foreign joint ventures, China is negotiating commercial contracts that will secure uranium imports for its long-term nuclear power expansion goals,” Clark stated.

Clark’s presentation, entitled Uranium: China’s Quest for Secure Supplies, highlighted options that Asia’s largest nation can pursue to fulfill future uranium supply for nuclear electricity generation. Presently, China has a production capacity of approximately 850 tU annually, which could be expanded through commissioning of new mines, expansion of existing mines, and uranium recovery from coal ash. In addition, Chinese joint ventures in Kazakhstan have the potential to add significantly to China’s annual uranium supply, according to Clark.

Clark also outlined the relationship between uranium and enrichment as it relates to China’s nuclear fuel supply. ”China could effectively decrease its mined uranium requirements by increasing its purchases or production of uranium enrichment services, although there is a technical limit to savings from this option,” Clark stated. There is rapid planned growth in enrichment capacity around the world, from expansion of existing facilities and construction of new plants in Russia, China, Japan, Europe, and the USA.

(Note to Editors: Uranium enrichment is a key step in transforming natural uranium into nuclear fuel for electricity production. It involves the process of increasing the concentration of U-235 and decreasing that of U-238. Uranium enrichment is sold as separative work units (SWU), the level of effort required to increase the concentration of U-235 in natural uranium. Uranium tails consist of depleted uranium with about 0.2-0.3% U-235, compared to about 0.7% for newly mined uranium.) [top]

TradeTech

7887 E. Belleview Avenue

Suite 888

Englewood, CO 80111
Phone: +1 (303) 573-3530
Fax: +1 (303) 573-3531
info@tradetech.com
http://www.uranium.info

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TradeTech Announces New Headquarters Office
Denver, CO, September 30, 2009—TradeTech, which publishes weekly and monthly uranium prices and provides consulting services to the international nuclear fuel markets, announced today that the company is moving its headquarters office to the Denver Tech Center.

Effective, October 1, 2009, the company’s new headquarters address will be:

Denver Tech Center
7887 E. Belleview Avenue
Suite 888
Englewood, CO 80111
USA
Phone: +1 (303) 573-3530
Fax: +1 (303) 573-3531
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TradeTech

7887 E. Belleview Avenue

Suite 888

Englewood, CO 80111
Phone: +1 (303) 573-3530
Fax: +1 (303) 573-3531
info@tradetech.com
http://www.uranium.info

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TradeTech Introduces Mid-Term Uranium Price Indicator
Denver, CO, January 2, 2009—TradeTech began publishing a new Mid-Term Uranium Oxide (U₃O₈) Price Indicator on June 30, 2009, to reflect the evolution of the international uranium market, which today includes three separate and distinct markets—the traditional spot and long-term markets, as well as a recently adapted market for mid-term transactions.

“The Mid-Term U₃O₈Price Indicator applies to transactions where deliveries begin immediately beyond the 12-month spot delivery window and occur within one to two years from that point, as either stand-alone agreements or as part of longer-term contracts,” said TradeTech President Treva Klingbiel. The new monthly price indicator is based on typical terms and conditions being offered and accepted in today’s market, such as payment terms, escalation factors, contract quantities and durations, quantity flexibilities, and delivery locations. It is not relevant to transactions that are market-escalated, cost of production-related, nor reflect any other pricing mechanisms that are not base-escalated.

“TradeTech has never presumed that a single price indicator could mirror all of the various prices for U₃O₈ negotiated worldwide. However, the market continues to evolve and today’s buyers and sellers are accepting more highly differentiated pricing terms and conditions for mid-term or intermediate uranium deliveries,” Klingbiel explained.

“All of TradeTech’s Price Indicators are meant to relate to transactions in the mainstream of the world market; that is, transactions that are free from significant governmental restrictions or interference and a participant’s desire to obtain or avoid certain aspects of a transaction, such as specific origins of material and litigation settlements,” Klingbiel added.

The new Mid-Term U₃O₈Price Indicator will be published in the month-end Nuclear Market Review, together with TradeTech’s monthly Market Values and Long-Term Price Indicators. [top]

TradeTech publishes the Nuclear Market Review each Friday evening, which includes TradeTech’s weekly uranium spot price, uranium trading activity, industry news, and market data. TradeTech also publishes The Nuclear Review, a monthly trade publication dedicated to the international uranium and nuclear energy industry.

TradeTech, along with its predecessor companies—NUEXCO Information Services, CONCORD Information Services, and CONCORD Trading Company—has supported the uranium and nuclear fuel cycle industry for more than 35 years, and is widely recognized for its expertise in trading activities and its comprehensive knowledge of the technical, economic, and political factors affecting this industry. TradeTech provides independent market consulting and services, and maintains an extensive information database on these industries.

For general and media inquiries contact:
TradeTech
600 Seventeenth Street
Suite 720 South
Denver, CO 80202
Phone: +1 (303) 573-3530
Fax: +1 (303) 573-3531
info@tradetech.com
http://www.uranium.info

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TradeTech Uranium Spot Price Declines in 2008—Year-end Price Settles at $52
Denver, CO, January 2, 2009—A trend that led to record uranium prices in 2007 was reversed in 2008, as the global financial crisis spilled over into the uranium market and caused the uranium spot price to tumble more than 40 percent.

TradeTech’s uranium spot price peaked early in the year at US$89 per pound uranium oxide (U₃O₈) on January 4, 2008. By mid-October, the price sagged to a low of $45 as near-term demand weakened. Production setbacks brought some uranium producers to the spot market as buyers and the price rebounded slightly in November before settling at $52 as the year came to a close.

The decline in the uranium spot price during 2008 was due largely to the presence of sellers driven by cash requirements, as well as a major sell-off by hedge funds and investors prompted by the recent economic downturn and credit crisis. “This sell-off created downward pressure on the spot price and forced other sellers to cut their prices to remain competitive in a market where demand has remained primarily discretionary and extremely price sensitive,” said TradeTech President Treva Klingbiel.

Weak utility demand and the desire of some sellers to generate cash before year-end all combined to keep spot uranium prices soft. “Buyers are expected to return to the market during the first quarter of 2009 as new budgets take effect and buying from India and China increases; however, it could take several weeks for the market to regain momentum,” Klingbiel added. [top]

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Uranium Spot Price Fades Amid Global Financial Crisis
Denver, CO, November 5, 2008—The uranium market experienced a price decline in October, with TradeTech’s spot uranium price sliding from $52 to $45.00 per pound, before rebounding slightly to $46.00 per pound U₃O₈ on October 31.

Like many commodity markets, the global financial crisis has affected the international market for uranium. In fact, TradeTech’s weekly uranium spot price dropped $4.00 to $47.00 per pound U₃O₈ on October 10, which marked the lowest price level since June 2006.

Since 2004, investors and hedge funds have been major participants in the spot uranium market, primarily as buyers. However, the recent economic downturn and credit crisis prompted a large sell-off from this sector as inventory holders were forced to liquidate assets. “This sell-off created downward pressure on the spot price and forced other sellers to cut their prices to remain competitive in a market where demand has remained primarily discretionary and extremely price sensitive,” said TradeTech President Treva Klingbiel.

Nonetheless, discretionary buyers were attracted to the market by the drop in prices and transaction volume for October was high. “The steep spot price decline attracted significant buying interest throughout October. It now appears the decline has abated and the spot uranium price is showing signs of firming,” Klingbiel added. [top]

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Uranium Enrichment Expands in the USA: Centrifuge Technology Leads the Way
Denver, CO, September 30, 2008—A battleground for uranium enrichment is shaping up in the USA as import restrictions and a weakening US dollar foster new plant construction.

All major uranium enrichment suppliers will be using centrifuge technology by the middle of the next decade and once centrifuge manufacture becomes routine and the costs matures, there will be “no stopping” the continual installation of centrifuge capacity, according to TradeTech CEO Gene Clark, who analyzed the uranium enrichment market in a presentation at the Platt’s Nuclear Fuel Strategies conference in Arlington, Virginia. “Enrichment production costs (and possibly prices) could then stabilize or drop, given the low operating costs of centrifuge technology,” Clark stated.

Clark also disproved the myth that uranium demand is inelastic by illustrating that as uranium prices rise, enrichers operate at lower tails assay and, therefore, decrease the need for uranium. As centrifuge capacity increases, the demand for uranium declines. “However, pricing for uranium and enrichment could become locked in a competitive environment, if the relationship between the two becomes more transparent to the markets,” Clark explained.

Trade restrictions continue to distort the market, particularly Russia’s share of the enrichment market. Restrictions against Russia will continue to result in a sub-optimal economically inefficient nuclear fuel market for the foreseeable future, he added.

Note to Editors: Uranium enrichment is the physical process of increasing the proportion of U-235 to U-238. Commercial nuclear reactor-grade uranium is usually enriched to about 3.5% U-235. Enrichment tails is the depleted uranium hexafluoride (UF₆) with less than 0.7% U-235.
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TradeTech Uranium Spot Price Reaches Record High in 2007—Year-end Price Settles at $89
Denver, CO, January 4, 2008—A price trend that began in 2005 continued throughout 2007 as TradeTech’s uranium spot price peaked at US$138 per pound uranium oxide (U₃O₈) on June 1—setting an all-time record since price reporting began in 1968.

The uranium spot price, spurred by investor interest in the market and thin near-term supplies, rose steadily over a two-year period before buying interest waned considerably in the summer of 2007 and the market began seeing interest from sellers to move material. By the end of September, the spot price had sagged to $75 per pound U₃O₈, largely due to the presence of sellers driven by cash requirements.

The first signs of a strengthening market occurred in mid-October, when after 16 weeks of falling or flat prices, TradeTech’s uranium spot price increased $3.00 to $78.00 per pound U₃O₈. Buyers began returning to the market, and in November, negative news from several producers about future supplies caused the spot price to climb further. By early December, the spot price had rebounded to $93 before settling at $89 per pound U₃O₈on December 31.

Recent demand in the spot market has been primarily discretionary and a majority of buyers have remained on the sidelines. “Weak utility demand and the desire of some sellers to generate cash before year-end all combined to keep spot uranium prices soft,” said TradeTech President Treva Klingbiel. “Although demand is expected to increase in January when 2008 budgets take effect, it may take several weeks for the market to regain momentum,” Klingbiel added.
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TradeTech Uranium Price Continues to Strengthen
Denver, CO, November 2, 2007–TradeTech’s spot uranium price climbed to US$90 per pound uranium oxide (U₃O₈) on October 31—a 20 percent increase over the past four weeks.

The spot price peaked in June at a record $138 per pound U₃O₈, dropped rapidly during August, and then languished over the month of September—closing that month at $75 per pound, primarily due to the sell-off of inventory by several cash-motivated sellers. The uranium price gradually gained momentum throughout October and recent news of production shortfalls from several sources prompted sellers to withdraw from the market. “The full impact of these adjusted production forecasts is not yet known, but clearly they do not bode well for buyers,” TradeTech President Treva Klingbiel stated. “The majority of sellers immediately raised their offer prices or withdrew completely from the market,” Klingbiel added. Near-term demand, particularly that of speculators and hedge funds that have begun re-entering the market, remains primarily discretionary.
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TradeTech Uranium Price Rebounds
Denver, CO, October 15, 2007–TradeTech’s spot uranium price rose to US$78 per pound uranium oxide (U₃O₈)—a $3 increase that followed 16 weeks of flat or falling prices. The uranium spot market price had been falling since reaching a peak of $138 in June, but now appears to be strengthening.

TradeTech’s weekly spot price increased four percent on October 12, as buyers began re-entering the market. The uranium price has recorded soaring prices over the past two years, as investor interest in the market surged and near-term supplies remained thin.

However, as the uranium price rose to record levels, buyers retreated. As a result, a number of sellers motivated by cash needs, lowered offer prices or accepted below current market bids in order to secure sales. These sellers have now successfully placed the majority of this material and appear to have satisfied their near-term requirements. “With this supply removed from the market, sellers, sensing that the market has reached an inflection point are cautiously moving their offer prices up,” TradeTech President Treva Klingbiel stated. “All current spot demand remains discretionary, but since the price declines of the past few months have abated, buyers and sellers appear to have found a price level where transactions can be concluded,” Klingbiel added.
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TradeTech Uranium Price Climbs to Record High
Denver, CO, May 5, 2007–The uranium spot market price soared to US$120 per pound uranium oxide (U₃O₈), setting an all-time record price as the market cautiously waits for uranium futures to begin trading on May 7.

TradeTech’s weekly spot price jumped 6 percent on May 4, just days before the debut of NYMEX uranium futures trading. It is the latest in a series of record price levels that have occurred over the past two years, as investor interest in the market surged and near-term uranium supplies remained thin.

The spot uranium market has been quiet since the mid-April announcement that NYMEX would launch a uranium futures contract. “Sellers, in particular, have been reluctant to commit to sales based on market-related pricing terms without a clear understanding of whether the financially settled futures contract would reflect prices in the physical market,” TradeTech President Treva Klingbiel stated. “And, the potential auction by a US producer further encouraged a ‘wait and see’ attitude by several potential sellers,” Klingbiel added.

Experienced players in the uranium market remain skeptical about futures trading, as they wait to see if it will bring increased transparency and liquidity to a market that has been traditionally dominated by end users, such as electric utilities and uranium producers.
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TradeTech and Spectron Energy Inc. Announce Business Alliance
Denver, CO, October 20, 2006–TradeTech and Spectron Energy Inc. have entered into an exclusive alliance agreement to share their expertise in jointly marketing the companies’ products and services to the international nuclear fuel industry.

TradeTech is widely recognized for its expertise in trading activities and its comprehensive knowledge of the technical, economic, and political factors affecting the nuclear energy industry. The company provides expert market consulting, advises participants in the buying and selling of uranium products and services, and maintains an extensive information database on these industries. TradeTech’s Nuclear Market Review provides an extensive array of uranium price indicators, and its monthly publication, The Nuclear Review, has been a source of key market information to the international uranium and nuclear energy industries since 1968. “TradeTech is excited about the opportunity to expand our unique services within the nuclear energy industry while partnering with a leading organization in the trading marketplace,” said Gene Clark, TradeTech’s Chief Executive Officer.

Spectron Energy Inc., a US subsidiary of Spectron Group plc, is a leading, specialized provider of services to the energy trading industry. It provides a neutral marketplace for OTC transactions between wholesale clients in natural gas, electricity, crude oil, petroleum products, coal, weather and environmental products. Spectron has developed into a diversified provider of services to the energy trading industry, predominantly in Europe as well as in the USA and Asia. Its clients include many of the world’s largest energy producers and marketers, as well as the energy trading departments of large financial institutions. The Group has enjoyed rapid growth, as energy trading volumes in Spectron’s key markets have grown significantly in recent years due to deregulation in the energy industry. “Our goal through this alliance is to provide an expanded range of trading opportunities and market mechanisms to the financial and nuclear fuel communities, as we have been able to accomplish in other energy markets,” Richard Frape, Director of Market Services at Spectron Group plc. stated.
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Uranium Enrichment--What’s Driving Prices Higher?
Denver, CO, March 31, 2006–As global interest in nuclear power continues to peak, increased demand for nuclear fuel is triggering higher uranium and enrichment prices. TradeTech’s uranium spot price climbed to $41 this month, while the long-term price for uranium enrichment rose for the third consecutive month to $122 per SWU (Separative Work Unit)—a sharp contrast to last year when enrichment prices remained flat at $113 per SWU.

The price of uranium, used to fuel nuclear power plants that generate about 16 percent of the world’s electricity, has increased significantly in the past year due to demand from nuclear utilities that rose faster than mine production and drew down stockpiles (see figure). Similar to the uranium market, enrichment prices are experiencing upward pressure due to strong demand from the nuclear energy industry. On a worldwide basis, total uranium enrichment requirements increase gradually through 2015 to about 55 million SWU per year by the end of the period, according to TradeTech’s Enrichment forecast report.

“Unfilled uranium enrichment requirements increase in an almost linear fashion throughout the period, reaching about 60 percent of requirements for the year 2012,” said R. Gene Clark, chief executive officer of TradeTech. The term unfilled requirements refers to the portion of requirements over a given period that, as of a given date, is not accounted for after the use of inventory and future deliveries under then-existing contracts. As such, it is the most relevant measure of future market activity--the amount of enrichment that must yet be procured in order to meet reactor requirements.

Today’s worldwide enrichment capacity exceeds requirements by one-third, but not all capacity is operable. In the USA, for example, USEC Inc.’s Portsmouth plant is in cold shutdown and its Paducah plant is not licensed to operate above 8 million SWU, according to the report.

“The Western market is in a precarious supply situation. As Western requirements grow, Western capacity is not planned to grow sufficiently to significantly change this shortfall situation,” Clark added.

TradeTech’s “Uranium and Enrichment Industry 2006 Market Report” is a comprehensive study that discusses how the market is preparing to address the current supply deficit and the effect on enrichment prices as the market attempts to bridge the gap between today’s shortfall and future enrichment capacity expansion.

Editor’s Note: Uranium enrichment is a key step in transforming natural uranium into nuclear fuel for electricity production. It involves the process of increasing the concentration of U-235 and decreasing that of U-238. Uranium enrichment is sold as separative work units (SWU), the level of effort required to increase the concentration of U-235 in natural uranium.
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Uranium Price Reaches $40--Can the Market Sustain this Landmark Price?
Denver, CO, March 10, 2006–The spot market price for uranium rose to US$40 per pound uranium oxide (U₃O₈) today—the first time since January 1980 that the uranium market has seen a spot price reach this level.

The uranium price first climbed to $40 per pound U₃O₈in April 1976 and remained in the $40 range until January 1980. The market in the late 1970s was considerably different than today’s uranium market, which begs the question: Is today’s $40 price sustainable? “We think it is,” said Gene Clark, chief executive officer of TradeTech, a nuclear energy market consultant. “After years of industry consolidation and tight financial conditions, uranium exploration has suffered and there will be a time lag, perhaps as long as five to seven years, before the supply side can fully respond. Thus, secondary supplies (primarily uranium inventories) will need to continue filling the ‘supply gap.’ With little strategic stock to mitigate supply disruptions, prices can rise dramatically, and in fact, have done so,” Clark advised.

The biggest difference in the uranium market today is that the supply/demand outlook is much clearer than it was a quarter century ago, based on more realistic contract terms and uranium requirements. “The challenge will be to bring more uranium production online to assure market balance,” Clark stated.

A number of factors contributed to the price rise of the late 1970s, including aggressive nuclear energy plans and a switch to fixed-commitment uranium enrichment contracts that locked utilities into firm commitments for a rolling 10-year period. During this time, large uranium inventories accumulated. In fact, until 1985 the Western uranium industry was producing material much faster than nuclear power plants and military programs were consuming it (see figure). However, by the 1980s uranium from canceled and deferred nuclear plants flooded the market. Uranium prices slid throughout the decade with few respites, leaving the price below $10 per pound U₃O₈by year-end 1989.

As uranium prices fell, producers began curtailing operations or exiting the business entirely, leaving only a few actively involved in uranium mining and causing uranium inventories to shrink significantly. Since 1990 uranium requirements have outstripped uranium production. World uranium requirements are expected to increase steadily throughout the next decade to a peak of over 200 million pounds U₃O₈, according to TradeTech. Uranium producers are gearing up for this added demand. A number of existing producers are planning for expansion, while new junior producers are preparing for uranium exploration and production.
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