Nuclear Fuel Market: Utilities Worldwide Test the Waters

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The nuclear fuel market was frenetic this week as pent-up utility demand showed its face globally and across the entire fuel cycle, from uranium to conversion, enrichment and enriched uranium product (EUP). Beyond this yet another uranium holding fund appears to have joined the fray, and a nonproducing junior miner bought yellowcake. The upward tick registered by Energy Intelligence's Uranium Price Panel, at $31.52 per pound U3O8 as of Jun. 3, up from from $31.13/lb. a week earlier, reflects a price that might not be keeping pace with emergent demand. That demand can be seen in this week's numerous outstanding requests for proposals (RFPs), which may presage greater price leaps. For the moment the utility demand appears largely discretionary, but sellers hope it will spur further buying interest from both end-users and uranium holding funds. "I think there’s a view that prices are rising, and there’s unfilled demand out in the future," one supplier told Energy Intelligence. "Companies are starting to ask themselves' is now the right time to enter into a long-term commitment before prices rise further?'" Over the past week two additional US utilities burst onto the market with fairly public demand. Duke Energy on Jun. 3 collected offers on 150,000 lbs. U3O8 for 2023 delivery but it's also looking for up to 1,330,000 kgU from 2022-26, with offers due Jun. 17. Late Friday, May 28, Exelon came out for 150,000-300,000 lbs. U3O8 per year in 2023 and 2024, and for another 350,000 lbs U3O8 for delivery in 2026, with bids due Jun. 11. The Illinois-based utility is also looking for 400,000-800,000 separative work units in a single 2026 delivery. Bids for that enrichment supply are due Jun. 8. This follows recent off-market activity from two other major US utilities, and comes as many other utilities across the world look for material. In South America, Brazil's state-owned Industrias Nucleares do Brasil pushed back its bidding deadline from Jun. 2 to Jun. 21 for 170,000 kgU as UF6 that it wants delivered by September, while Argentina's nuclear operator has approached a small number of suppliers looking for uranium. In Europe, Swiss and Romanian operators apparently continue to evaluate offers for small quantities of U3O8, while Dutch utility EPZ, operator of the small Borssele pressurized water reactor, is looking for some 17 tons of EUP. Bids are due Jul. 1. Given the mixed-oxide fuel already loaded into Borssele, the additional EUP will cover several reloads. Considerable demand for enrichment services emerged in Asia where China National Nuclear Corp. subsidiary China Nuclear Energy Industry Co., or Cneic, is out for as much as 1 million SWU, with bids due Jun. 20 for Shanghai delivery by year's end. Meanwhile Korea Hydro & Nuclear Power is set to release a major RFP -- to the tune of 3.3 million SWU -- with delivery starting in 2026. Most notably, the market appears to have seen its first new contract for SWU supply to Japan since the March 2011 Fukushima disaster -- an indication of creeping demand from utilities that have managed to restart reactors, although there is still a lot of inventory overhang (NIW May28'21). Evidence of any Japanese buying will undoubtedly bolster the narrative that the nuclear fuel market has finally turned a corner. "What we've seen in the utility market is that they're all starting to believe in the story that the price will go up," one trader told Energy Intelligence. "I expect that the price will jump in July and August." Should that occur, it will likely still be less on the back of utility demand -- the many recent RFPs are still for small amounts -- than on the funds buying yellowcake. One new low-profile mystery fund was apparently quite active purchasing material last week, and may have picked up a small amount of uranium this week. Multiple sources agree that the fund is determined to keep its name out of the press, but it is managed in Canada and evidently boasts no uranium industry veterans. Much more public is Western Uranium, which became the latest junior to purchase material when it picked up some 125,000 lbs. U3O8 for delivery before June 2022. "We got today’s price but we don't have to pay for it till end of the year: We take delivery when we pay," company CEO George Glasier, a longtime industry veteran, told Energy Intelligence. Phil Chaffee, London Uranium Price Panel Chg. 6/3 5/27 5/20 5/13 5/6 4/29 4/22 4/15 4/8 4/1 3/25 3/18 3/11 Price ($/lb U3O8) 0.39 31.52 31.13 31.11 30.63 30.21 29.01 28.79 29.36 30.50 31.13 29.90 29.75 27.36 Total Assessments 2.00 12.00 10.00 10.00 9.00 10.00 11.00 11.00 10.00 9.00 8.00 10.00 11.00 9.00 % within 1 StDev -3.33 66.67 70.00 33.33 70.00 90.00 72.73 72.73 70.00 66.67 62.50 80.00 63.64 66.67 Low ($/lb U3O8) 0.40 31.40 31.00 31.00 30.50 30.00 28.95 28.30 29.00 30.00 31.00 29.80 29.45 27.25 High ($/lb U3O8) 0.30 31.60 31.30 31.25 31.00 30.80 29.25 29.30 29.50 31.00 31.35 30.25 30.20 27.75 Variability* -0.06 0.00 0.06 0.02 0.24 0.14 0.06 0.03 0.05 0.15 0.17 0.11 0.07 0.11 *This represents the value of the potential range of conceivable final averages that might result when

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