Uranium Spot Prices Decline in ‘Disinterested’ Market, Ux Says
Uranium spot prices fell 0.5 percent as demand for the nuclear fuel declined, almost two months after Japan’s Fukushima Dai-Ichi atomic power station was damaged by an earthquake, Ux Consulting Co. said.
Uranium-oxide concentrate for immediate delivery dropped 25 cents to $55.25 a pound in the seven days through yesterday, Ux said in an e-mailed report today. The price is based on the most competitive offer tracked by the Roswell, Georgia-based company.
Four of the six reactors at Tokyo Electric Power Co.’s Fukushima nuclear plant were damaged by hydrogen blasts after a magnitude-9 earthquake and ensuing tsunami on March 11 knocked out backup power and cooling systems. Radiation leaks have forced the evacuation of tens of thousands of people. The crisis may hurt the atomic power industry’s credibility more than the 1986 Chernobyl disaster, UBS AG analysts said April 4.
“Both price and demand have declined, as the implications of the accident have begun to sink in,” Ux said in its report. “The price may continue to drift down to the extent that sellers seek to place material in a largely disinterested market.”
Nuclear-power utilities buy the bulk of their uranium for processing into fuel from mining companies, with the contracts mostly extending beyond 12 months. The market for immediate delivery, or spot market, allows trading for delivery within a year and includes financial investors. The U.S. government also periodically conducts auctions to reduce stocks.
Long-term demand for uranium has declined because of the Fukushima crisis, Ux said. The spot price for the nuclear fuel has fallen about 20 percent since the incident and could drop further, it said.
“Reactors are being shut down or delayed around the world,” Ux said. “It appears that our base case requirements will drop by about a half billion pounds through 2030, and our high case by roughly 600 million pounds, the result of our projection that demand growth will be delayed by four to five years over what was previously forecast.”
To contact the reporter on this story: Jason Scott in Perth at jscott14@bloomberg.net
To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net; Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
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