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Speeches by TradeTech's Staff
| The aspects of a liquid and transparent market are discussed. TradeTech CEO Gene Clark suggested that the real issue seems to be
pricing in long-term uranium contracts. “Market power is hardly ever balanced, so long-term contract terms tend to lock in the stronger party’s advantage,” Clark explained. He concluded that uranium market participants have transparency, but not necessarily future price direction. Clark stated that the lack of liquidity is a myth. “There are sufficient producers, traders, and speculators (and governments) with uranium equivalent to make an orderly market,” he said.
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| • Secondary supply is about 40% of world requirements.
• There are many categories and sub-categories of secondary supply.
• Russian HEU feed is the largest source of secondary supply.
• Even without a continuation of the program to dismantle and blend down nuclear weapons, secondary supply will still be 15-25% of requirements.
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| The market for uranium can be described as a "demand-driven" market, under which the fundamental requirements for uranium to fuel nuclear power plants (uranium’s only significant use today and in the foreseeable future) are determined not by the price of uranium, but rather by the operational needs of the power plants using uranium fuel. However, in addition to the traditional economic and operational factors that any industry encounters, the nuclear fuel business (like the rest of the nuclear power industry) is subject to government involvement and political decisions that do not have a rational or economic basis, and are therefore nearly impossible to predict.
Over the past 18 months the prices for uranium and conversion have risen dramatically. In fact, today’s current price of $29.50 for a pound of uranium is the highest seen in the market in the last 25 years, and the recent $12.00 per kgU for conversion services (since dropped to $11.50) is the highest seen in that market’s history, since NUEXCO began quoting its Conversion Value in January 1981. The reasons for this change in market direction are multi-faceted and rooted in economic, operational and political events that have taken years to unfold.
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| The intervention of government in international uranium markets either through ownership or trade regulation.
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| On a world-wide basis, the world is awash in enrichment capacity, enriched uranium from demilitarization is (and will be) adding to this glut, and trade restrictions are preventing the efficient allocation of enrichment supply
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• What do major world energy forecasters have to say about nuclear energy?
• What kind of world corresponds to the various nuclear projections?
• What are the corresponding demands for uranium and enrichment?
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• Expect more utility consolidation • Diversity of supply, while taking on a new meaning, will still be the goal of U.S. utilities - Suppliers will provide geopolitical diversity - Suppliers will have access to secondary sources, like HEU feed and excess inventory • More buyer-seller balance likely, with both financially healthier than currently • Utility buyers will seek less disclosure of commercially sensitive information, to mask their electricity production costs Request Speech |
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