Uranium: The required signals are not there (yet!)
The market is looking for the combination of Japanese restarts, supply disruption and most importantly there has been no significant return to the long term contracting market. Stop/start progress on Japan restarts and some production curtailment has occured but no significant return to the long term contracting market as the market remains oversupplied in the short term. The long term fundamentals remain solid based on known reactor growth but the market remains in transition.
The total value of deals decreased to US$13.2 million in Q1 2016 from US$63.7 million in Q4 2015. The number of deals decreased to four during Q1 2016 from five deals in Q4 2015.
On April 2016, Australia announced plans to supply uranium to Ukraine for power generation.
1"Resources and Energy Quarterly", Bureau of Resources & Energy Economics (BREE), Australian Government, March quarter 2016, accessed April 2016
2The uranium market is largely driven by long-term contracts (term price), with an historical uranium market of about 200Mlbs per annum versus the spot price market that is not a liquid market, with annual volumes of about 30Mlbs.
3Resources and Energy Quarterly”, Bureau of Resources & Energy Economics (BREE), Australian Government, March quarter 2016; Uranium and nuclear power in Kazakhstan, April 2016, World Nuclear Association; Uranium projects, Cameco company website; Uranium in Canada, March 2016, World Nuclear Association, accessed May 2016.
4Resources and Energy Quarterly”, Bureau of Resources & Energy Economics (BREE), Australian Government, March quarter 2016; Japan nuclear update, April 2016, Nuclear Energy Institute, accessed May 2016.
5MergerMarket and Thomson One; Australia to sell uranium to Ukraine, April 2016, The Sydney morning herald website, accessed May 2016.