Uranium Prices Stable, Iran Plans Uranium Purchase

While the spot uranium market recently quieted after a recent rebound, this week market participants are reacting to the report that Iran plans to purchase uranium from Kazakstan.

Iran announced that it will buy 950 tons of uranium ore from Kazakhstan over three years and at the same time Russia will help the country produce nuclear fuel. This purchase of uranium will not violate Iran’s 2015 deal over its disputed nuclear program.

Even though it is not a really large purchase, it is a positive for the uranium market, which is in need of a demand boost. Recently, prices went through a recovery rally, but that rally occurred solely due to supply fundamentals. Late in 2016, uranium prices started to lift as supply cuts started to come into effect. In early 2017, the rally took off as major uranium producer Kazakstan announced a large supply cutback.While this sent prices higher; they ran into resistance last week and little is expected in the near-term with a supply chain that is still crowded.

Significant upside is not expected until the demand side of the equation sees a change. Right now demand remains weak as the Fukushima nuclear disaster resulted in the idling of a lot of nuclear power capacity. Long-term, demand growth is expected as the dozens of nuclear power plants currently in development are brought online. Even though the Fukushima disaster caused an influx of negative sentiment when it came to nuclear power, nuclear power remains one of the most economical and low-pollution means of generating power. As China moves to reduce pollution while providing electricity for its growing population, nuclear power will remain one of the country’s best options to generate electricity.

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Leia Toovey has a B.Sc. in geology from Simon Fraser University, and her degree had a focus on resource economics. Out of school, she started working in the booming mining industry of Vancouver, Canada, covering junior mining stocks and commodities including potash, copper, nickel, oil and gold. Then she moved to New York and worked as a commodities analyst covering a breadth of commodities, from the Baltic Dry Index through the softs. As a geologist she has a greater understanding of the exploration and extraction side of commodities, and how changes in technology and the depletion of resources impact pricing. At Economic Calendar she covers a variety of commodities, providing daily technical and fundamental analysis and assessing major market developments.