Bruce J. Nicholson, CFA | VP of Corporate Development for UEC just announced (April 7, 2020) that the spot uranium price is on the move again, and we see offers in the $29.50 - $30.00 per lb U3O8 range. The price rise is being driven by this morning’s announcement that Kazatomprom, the world’s largest uranium producer, is curtailing production for three months. Their current guidance is calling for a total reduction of ~10 million lbs of annual production over three months. Together with the prior production cut announcements at Cigar Lake, and adding in Namibia (Rossing & Husab), uranium production would be reduced by ~-6.3 million lbs/month or ~53% of total monthly production. Below are the details of our current estimates:
Annual Uranium Production: 142.3 M lbs/yr = 11.85 M lbs/mo
Kazatomprom = 59.085 M lbs/yr = 41.52% …4.924 M lbs/mo (announcement says -4,000 Tons U over 3 months = ~10.4 M lbs) /3mo= (~3.47 M lbs/mo)
Cigar Lake = 18.0 M lbs/yr = 12.65%.....1.5 M lbs/mo
Rossing = 5.3 M lbs/yr = 3.72%.....0.44 M lbs/mo
Husab = 11.0 M lbs/yr =7.73%.....0.917 M lbs/mo
Total global monthly production cuts = 6.327 M lbs/mo
Total global production =11.85 M lbs/mo = an impact of 53.4% of total monthly global production – so far.
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