-Utilities looking to incorporate ESG-compliant uranium suppliers
-BHP Group reports uranium production
-Uranium spot price rises by less than 1% for the week<\/strong><\/p>\n
By Mark Woodruff<\/p>\n
On July 19, Uranium Participation Corporation (UPC) was formerly restructured as Sprott Physical Uranium Trust (SPUT) and relisted on the Toronto stock exchange with a net asset value of US$497.8m, based on uranium holdings of 18.2mlbs.<\/p>\n
This drew significant interest from both buyers and sellers in the uranium market, due to the possibility the Trust could introduce additional demand into the spot uranium market<\/strong>, explains industry consultant TradeTech.<\/p>\n Importantly, this arrangement is a requirement for fund listings on the New York stock exchange, a move planned by Sprott Asset Management that would open SPUT to a wider market. In particular, a US listing would gain the attention of US investors who wish to invest under US regulations or limit exposure to the Canadian dollar.<\/p>\n The asset manager points out SPUT will increase the frequency of its reporting, and will publish its net asset value on a daily basis. The link to follow the NAV is https:\/\/sprott.com\/investment-strategies\/physical-commodity-funds\/uranium\/<\/a> The tickers to follow the trust's share price on the Toronto exchange are U.U in US dollars and U.UN in Canadian dollars.<\/p>\n One of the key developments of this transaction is SPUT’s future ability to utilise an at-the-market facility. This is a mechanism that allows listed entities to raise funds without engaging in a formal equity offering. It is a process that will allow the trust to incrementally sell shares as and when demand arises, points out TradeTech.<\/p>\n Although Sprott’s client base is dominated by institutional investors, it hopes SPUT will provide an attractive route for retail investors to get involved. <\/p>\n The investment manager currently has an established position within the commodity markets with four physical funds covering precious metals, and particularly “Bullion Trusts” for gold, silver, platinum and palladium.<\/p>\n Company news <\/u><\/p>\n ASX-listed BHP Group<\/strong> ((BHP)) reported uranium production of 1.35mlbs for its fourth quarter ended June 30, down -26% from the previous quarter and -40% below output in the same quarter a year ago.<\/p>\n For the full year ended June 30, production totalled 7.2mlbs, which was down -11% compared to FY20.<\/p>\n Sales for FY21 totalled 7.81mlbs, down -14% compared to FY20. The company produces uranium as a by-product at its Olympic Dam operation in South Australia.<\/p>\n Uranium pricing<\/u><\/p>\n TradeTech Weekly Spot Price<\/strong> Indicator rose US20c to US$32.50\/lb last week.<\/p>\n The Indicator has shown little volatility over the last eight weeks, and has shown notable stability since reaching a high mark of US$32.70\/lb earlier this month. It has increased nearly 7% so far in 2021, yet stands -1% below its value from one year ago. <\/p>\n The average Weekly Spot Price Indicator in 2021 is US$30.38\/lb, US$0.67 above the 2020 average.<\/p>\n Buying activity was muted last week, according to TradeTech, with four transactions involving just over 800,000lbs U3O8 equivalent.<\/p>\n In many cases, utilities are looking to incorporate additional diversity into portfolios, with a view toward enhancing their security of supply and encouraging depth of competition in the supplier pool for the future, notes TradeTech.<\/p>\n Also, important to a growing number of utilities is the desire to incorporate ESG-compliant suppliers<\/strong> into their supply portfolio and\/or capitalise on potential opportunities from amending an existing contract commitment.<\/p>\n TradeTech's term price<\/strong> indicators are US$32.40\/lb (mid) and US$35\/lb (long).<\/p>\n In the term uranium market, demand remains strong with a number of utilities evaluating potential purchases.<\/p>\n Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)<\/a>" – Warning this story contains unashamedly positive feedback on the service provided.<\/em><\/p>\n<\/p>\n