\n-Utilities returning to term markets
\n-BHP shuts down Olympic Dam uranium production<\/strong><\/p>\n
By Greg Peel<\/p>\n
Activity in the uranium spot market was once again brisk last week, with industry consultant TradeTech reporting 1.4mlbs U3O8 equivalent changing hands over the week. Traders dominated the buy-side although utilities were also involved. Once again there was a disparity in pricing dependent on delivery location, with most transactions last week requiring Canadian delivery.<\/p>\n
TradeTech’s weekly spot price indicator has risen US50c to US$26.50\/lb.<\/p>\n
There were four transactions concluded in term markets last week, underscoring the perception the long-anticipated pick-up in utility purchases may finally have arrived. At 400,000lbs in total the volume is not much to speak of, but there is currently a proposal out from one utility seeking 2.8mlbs over 2019 and another long term delivery proposal for 10.8mlbs.<\/p>\n
TradeTech’s term price indicators remain at US$29.50\/lb (mid) and US$31.00\/lb (long).<\/p>\n
Involuntary Outage<\/u><\/p>\n
The uranium market has become used to miners announcing operational shut-downs\/suspensions or production cut-backs over the past few years, in light of uneconomical prices, but a shutdown at BHP’s ((BHP)) Olympic Dam mine in South Australia, announced last week, is not intentional.<\/p>\n
BHP released its full year earnings results last week and the company disclosed a technical failure at Olympic Dam which is being addressed, but production may cease for up to eight weeks.<\/p>\n
Olympic Dam produced 2.5mlbs U3O8 in the June quarter, in line with the March quarter, but up 52% from the June quarter 2017. Over FY18, BHP reports 7.4mlbs production, down -8% from 2017.<\/p>\n
The technical problem comes just months after BHP completed a US$255m upgrade at the site.<\/p>\n
On the demand side, both China and Russia fired up new reactors last week.<\/p>\n
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