Uranium Outlook 2017 - Flat Prices and Emerging Demand

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

Date posted: 03/14/17

Without a doubt, 2016 was one of the toughest years in recent memory for the uranium industry, in particular, prices dropped to 12-year lows to $18.75 per pound in October, and reactors have been slow coming back online since the 2011 Fukushima damage via tsunami. Of course, a number of companies in the sector have also felt the ramifications of the low price. Ted OConnor, CEO of Plateau Uranium, said that the resource sector had been in the worst downturn seen in decades at the end of 2016, and we were seeing classic bottom of market events. What is more, OConnor added that you can sense the bottom is here, which could mean good news for the uranium industry, at least in the long run. To get some insight and thoughts on the uranium outlook 2017, Chang elaborated with INN, along with Patrice Bruneton, a consulting geologist with IAEA indicating that despite demand from China potentially doubling to 9,800 metric tons annually by 2020, the uranium price has no doubt struggled significantly. They were expecting a price recovery in 2016, but were wrong, Chang said. The impact of the carry trade to satisfy emerging uncovered requirements was much stronger than anticipated. As we move into 2017 and beyond, the outlook for the uranium market is hopeful. Chang said Cantor Fitzgerald believes 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 and utilities will be forced to enter into the spot market more aggressively to satisfy their needs, Chang said. This will kick off the violent price increase we have been expecting over the past year (2016). However, FocusEconomics expects the uranium price to pick up in 2017, averaging $33 per pound in the fourth quarter of 2017.