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Apr 29, 2016 - The news late last week that Cameco will shutter its Rabbit Lake Uranium Mine and reduce its production profile by 5 million pounds has continued to filter through the market as the company recorded a first quarter adjusted net loss of C$7 million (US$5.6 million) today. A number of other suppliers have recently reported losses and potential cutbacks in response to weak nuclear fuel prices. Rio Tinto's Rössing Uranium recorded a N$385 million (US$26.6 million) loss in 2015, compared to a N$91 million (US$6.3 million) loss in 2014, the company reported earlier this week. Production dropped to 1,245 tU3O8 (2.7 million pounds U3O8), compared to 1,543 tU3O8 (3.4 million pounds U3O8) in 2015. Rossing Uranium revenue decreased by 23 percent due to low sales.
Toshiba Corp. said it would write down the goodwill value of its nuclear power plant business, including its US subsidiary Westinghouse Electric Co. The electronics giant said on April 26, it would book the one-time loss of ¥260 billion (US$2.3 billion) to reflect the change in the business's earnings prospects and Toshiba's financial standing. Bannerman Resources has applied for a voluntary de-listing of its securities from trading on the Toronto Stock Exchange (TSX). The company said the decision to de-list is due to several factors, including limited trading volume of Bannerman's shares on the TSX. The UK government must lay out specific options to fill a looming energy shortfall after Électricité de France (EDF) has again delayed a decision on whether to build Britain's first nuclear power plant in 30 years, the opposition Labour Party said. EDF has reportedly pushed back for several months a final investment decision on the US$26 billion plan to build two reactors at Hinkley Point in southwest England.
One positive development was the news that state utility ESKOM has issued a request for information, seeking potential local suppliers of mined uranium to fuel the Koeberg Nuclear Station in South Africa. ESKOM published a notice earlier this month, saying it was developing a commercial sourcing strategy for "uranium, uranium conversion services, and uranium enrichment services" needed for the nuclear power station from 2018 onward. The loss of 5 million pounds from the market due to the Cameco announcement did prompt market participants to lock in material and prices early this week. However, after the initial flurry of activity following the announcement, market participants retreated to assess the potential longer-term impact. Sellers responded by raising offer prices, while buyers were wary of committing to large purchases at higher prices.
A number of market participants also await feedback from recent mid- and longer-term Requests for Proposals (RFP). As a result, transaction activity slowed throughout the week with buyers and sellers exhibiting little willingness to move as the week came to a close. A total of more than 700,000 pounds U3O8 equivalent changed hands over the course of the week, as compared to over 1 million pounds U3O8 reported last week. TradeTech's Weekly U3O8 Spot Price Indicator dropped to $27.50 per pound U3O8, down $0.10 from last week's Indicator and unchanged from the April 28 Daily U3O8 Spot Price Indicator. read more