Our Products - Uranium Market Study

In the Uranium Market Study - First Quarter 2012 Edition, TradeTech has taken the opportunity to amend the World Nuclear Association demand assumptions (adopted in the Fourth Quarter 2011 Edition) in light of general global developments, but principally in Japan. TradeTech has also downgraded its Stock Multiple Factor (SMF) from 1.5 to 1, a ratio that is utilized to calculate additional procurement ensuring stock levels are maintained as a proportion of total requirements. The result is the removal of 120 million pounds U3O8 over the forecast period through 2025, which coupled with a reduction in supply availability, results in a revised projected price outlook.

Table of Contents: Uranium Market Study (PDF) 

Feature Analysis: Realized Prices, Incentive Prices, and Clearing Prices

Whether primary seller or end user, the paramount price of interest is the realized price. It is not an indicator as such, but a number that defi nes a company’s revenue or cost stream. It refl ects the average price of all deliveries made in a particular year. Fundamental to TradeTech’s long-run FAM forecast is the availability of primary production -- and this is a principal concern for the operators of the world’s 440 reactors. So, while many commentators focus on whether clearing prices will reach the necessary incentive level to induce production, TradeTech has chosen to model and evaluate where realized prices are moving -- and whether they will be suffi cient to promote the investment the industry needs. TradeTech’s Realized Price Model (RPM) has been developed to provide insight into the sustainability of the uranium mining industry.

TradeTech’s principal uranium pricing models have been fully reviewed:

1) The Dynamic Pricing Model (DPM) -- an econometric model that defines the historic relationship between Active Supply, Active Demand and Spot Price. TradeTech’s projection of Active Supply and Active Demand allows the algorithm to forecast spot prices over the coming 24 months.

2) The Forward Availability Model (FAM) -- a model that defi nes the long-term price by the availability of supply and demand in the Prime Contracting Period (PCoP) -- a period that begins three years forward and lasts for six years. The supply surplus/defi cit in the PCoP is evaluated for each year through 2025 using FAM Profi les. A projection of the Long-Term Price is generated.

Key Additional Features in this Edition:

* Year-to-date uranium market review
* Full revision of long-range demand projections
* A full review of Secondary Supply
* The Call On Mine Production is defi ned (Demand less Secondary Supply)
* Full review of ‘Pivotal Projects,’ could these projects alone balance the market?
* A review of the Junior Mining Sector: capital cost, production costs, and project viability
* Evaluation of the FAM 2 price scenario defi ned by delayed uranium production
* Exploration Expenditure Projections and Project Financing Review -- underpinning assumptions of future supply availability

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