Yellowcake blues – “It has never been a worse time for uranium miners”
Not just Toshiba – the global nuclear industry is in crisis everywhere, Ecologist, Jim Green 3rd February 2017 “………..”It has never been a worse time for uranium miners”, said Alexander Molyneux from Paladin Energy in October 2016.
“No major commodity had a worse 2016 than uranium”, Bloomberg said in January 2017. “In fact, the element used to make nuclear fuel has had a pretty dismal decade.”
Uranium mining ramped up 5-10 years ago in anticipation of the nuclear renaissance that never materialised. Hence a glut, hence the low price. The price has fallen for seven of the past nine years. The spot price fell 41% in 2016, sinking to a 12-year low (US$18 / lb U3O8 in November).
The spot price averaged about $26 last year, and is expected to average just $23 in 2017 according to the median forecast of analyst estimates compiled by Bloomberg in December 2016. “I don’t think there’s a mine profitable at current spot prices”, Leigh Curyer from Canadian uranium miner NexGen Energy told Bloomberg.
The long-term contract price fell from $44 in January 2016 to $30 in December. It would need to double to encourage the development of new mines. KPMG noted in December that “uranium producers are expected to reduce production and cut costs through 2017 and 2018, with high cost mines likely to scale back or close. New projects are expected to remain on hold.” RBC expects the sector will be oversupplied until around 2024.
The uranium enrichment industry is in much the same place as uranium mining. The spot uranium enrichment price has fallen consistently since the 2011 Fukushima disaster, and it fell by a third between early 2015 and late 2016 to reach an all-time low.
And since cheap, abundant enrichment capacity can substitute for newly mined uranium (either by extracting more uranium-235 during uranium enrichment, or re-enriching tails), this has and will continue to keep uranium prices down. http://www.theecologist.org/News/news_analysis/2988607/not_just_toshiba_the_global_nuclear_industry_is_in_crisis_everywhere.html
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of the week – Disrupting War & Militarism in Oceania. Active solidarity. Radical practice.
Antinuclear 
It may be a coincidence, but uranium oxide (yellowcake) spot prices bottomed out in November 2016 and started to rise steeply in early December.
Donald Trump is behaving as expected, which in the case of uranium means that he is likely to be full-on pro-nuclear – both weapons and electricity.
It’s possible that the sharp increase in prices in December is an indication of what the nuclear industry knows/guesses about Trump.
On the other hand, such sharp price rises have occurred since Fukushima and have been followed by a steady decrease to even lower prices than before the increase.
One thing we can be sure about, the nuclear industry will be lobbying the Trump administration for all its worth and probably getting a receptive hearing.
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I think that you are on the right track in this, Dennis. There are other shares that have gone up, in anticipation of ‘better times’ for business, because of Trump.
But – time will tell!
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