Uranium Outlook 2017 - Experts Expect a Slow Recovery (February Update)

Uranium (Nuclear Minerals) / Exploration, Mining, Marketing, & Acquisitions

Date posted: 02/25/17

In terms of supply, the largest miner of uranium in the world, Cameco announcement in April (2016) that it would be halting production at its Rabbit Lake mine, the longest-running uranium mine in Saskatchewan, has no doubt impacted the industry. The company had previously set a target for production in 2016 at 30 million pounds of uranium, which has since changed to 25.8 million pounds. The outlook for the 2017-2018 uranium market is hopeful. Chang said Cantor Fitzgerald concludes that prices will be flat to slightly higher in 2017, as the carry trade continues to push emerging uncovered demand forward by a year or two. But, he added, as interest rates rise and increasing percentage of global uranium requirements become uncovered, there will be a point where the carry trade will not be able to satisfy the demand. Utilities will be forced to enter into the spot market more aggressively to satisfy their needs, Chang said. This could kick off the violent price increase he has been expecting. On the other hand, FocusEconomics expects the uranium price to pick up in 2017, averaging $33 per pound in the fourth quarter of 2017. While it is not clear when that price kick will happen, FE anticipates that future supply will keep up with emerging demand, although it will not happen any time soon. In November, it was reported that Berkeley Energia (Spain) has started working on a $100 million uranium mine, although it is not expected to open until 2018. It has a target production of 4.5 million pounds of uranium per year, and will reportedly be one of the lowest-cost uranium producers in the world. World Nuclear Association points out that there are 440 commercial nuclear power reactors operable in 31 countries, with 60 more under construction. Of course, it will require some time before the reactors have any impact on the uranium industry, it will sooner than much later. China has large stocks and several mining projects that are ready to come on line. Read on.