Centrus says Russia canceled TENEX’s licence to export low-enriched uranium to US
Russia, the world's largest supplier of enriched uranium, said last week it had imposed temporary restrictions on the fuel's export to the US.
The uranium market had a lot going for it at the start of 2014, including the prospects of a Japanese nuclear reactor restart that now, at least partially seems to be close.
The end of the Russia-US megatons to megawatts program last August, eliminating a huge source of supply was also supposed to support the market that had been in a long-term decline since hitting all-time highs of $135 in 2007 and was devastated after the Fukushima disaster in 2011.
China’s plans to approve six to eight plants a year through 2020 – part of its war on pollution – is still being worked at but so far the uranium price has shrugged all good indicators sliding to $28 a pound earlier this year, levels last seen in 2005.
Haywood Securities in a new research note reports that the turnaround in the spot U3O8 price is gaining momentum, jumping 3.3% to $31 a pound this week and up nearly 8% in August.
The broker’s average price tracked by the Vancouver-based independent investment dealer with $5 billion under management has enjoyed 13 session gains out of the last 15, adding more than 10% in August to $31.63.
The long term price, where most uranium business is conducted, is still languishing at $44 a pound, a six year low, but the differential to spot has narrowed 35% over the past year, which at some point should help drag the long term price higher.
Haywood forecasts a spot uranium price of $39.50 and a long term price of $57.50 next year and further improvement in prices to more than $70 within five years.
After an early 2014 run-up uranium stocks entered a sharp correction in March, but many shares in the sector is now playing catch-up with the improving spot price.
Near-term producers tracked by Haywood are up almost 25% so far this quarter, while explorers have enjoyed a 15% bounce since the beginning of July.
