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Uranium Week: India Has Big Plans

Industry consultant TradeTech’s weekly uranium spot price indicator fell -US25c last week to US$22.00/lb as financial urgency forced sellers in Europe into action. Recent weeks have seen the price gap for uranium for European delivery widen over the equivalent in the US given a comparative tightness of European supply.

That gap closed slightly last week as some sellers gave up on holding out for better prices. TradeTech reports seven spot transactions were concluded totalling 900,000lbs U3O8 equivalent.

The spot uranium price has shown minimal movement on a week to week basis this year on a combination of uncertainty of the impact of production cuts announced by major producers late last year and uncertainty over the pending section 232 petition investigation in the US with regard US uranium imports. It is 232 that gave us Trump’s steel and aluminium tariffs.

Yet day to day spot price movements have been rather volatile of late, TradeTech notes largely because traders are dominating the buy-side, with utilities content to sit and wait for lower prices, and also the sell-side, along with producers who have little choice but to offload their product. It has not been unusual for prices to dip sharply earlier in the week, sparking up the buyers, before sellers back off again to provide for a more minimal week on week change.

Self Sufficient

There are currently five nuclear reactors under construction in India – four Indian-designed and one Russian-designed. There are a further 19 reactors planned for construction over the next several years, including 10 Indian-designed reactors scheduled to be operational by 2031.

With all but five of the 40-odd reactors operating in Japan pre-Fukushima remaining idled, nuclear power reduction policies in place in Europe and South Korea, and uncertainty with regard the ongoing viability of US nuclear power, India appears set to join China as a primary driver of future uranium demand growth. But while China will have to import uranium, India boasts its own resources.

Hence India has unveiled plans to increase the country’s uranium production “tenfold” over the next 15 years. The plan includes the maintenance of existing production, expansion of production at some sites and the construction of new mines and processing facilities across different parts of the country.

The aim is to become nuclear self-sufficient. If all goes according to plan, presumably India will become a uranium closed shop that will have no effect on the global demand/supply balance.

India signed a major uranium import deal with Australia in 2014. The first shipment was not actually made until mid-last year, at which point the Australian government declared the deal with India could double the size of the Australian uranium industry.

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The content of this information does in no way reflect the opinions of FN Arena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FN Arena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FN Arena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.



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