In 2017, Jim Ostroff reported that market sources say U.S. companies appear to be on course to produce about 1.6 million pounds of uranium this year, the lowest amount since 1951. Jim Ostroff explains that it isn't just production that has fallen off; prices have also plummeted. Uranium is facing stiff competition from natural gas and renewable mandates, so utilities are buying it differently in the market—but will that last? U.S. uranium production totaled 2.9 million pounds last year after plummeting 40% from 2014, when it was about 5 million pounds. With uranium production continuing to ramp down in Wyoming and Nebraska, market sources say U.S. companies this year appear to be on course to produce about 1.6 million pounds, the lowest amount since 1951.
Producers have shut-in virtually all facilities, halted all new investment and are producing only enough uranium to meet contractual obligations signed years ago. U.S. production has tanked because uranium spot prices have, as well. They’re just over $20 a pound today, down 71% since reaching $70 in early 2011.At that price, no uranium producer in the U.S., or other countries, can make a profit extracting uranium for sale on the spot market. That’s why the world’s largest producers have significantly reduced production, including Canada’s Cameco, Kazakhstan’s Kazatomprom, the US’s Energy Fuels and a host of Australian companies The issues are manifold: Years ago, many utilities – concerned about a run-up in uranium prices by the middle of this decade, signed long-term supply contracts that run through 2020 or so.
Original URL: https://www.platts.com/videos/2017/october/us-nuclear-uranium-production-prices-101717
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