The Strategist

Quarantine measures are lowering uranium supply


04/03/2020 - 06:14



Coronavirus control measures, which universally resulted in lower raw material prices, have positively affected the cost of natural uranium. Mining companies are closing mines due to quarantine; as a result of last week, uranium prices jumped 13% immediately to $ 27 per pound.



Kakadu National Park uranium mining
Kakadu National Park uranium mining
While most metals are getting cheaper amid falling demand, the cost of natural uranium has begun to rise. Spot prices for the week ending March 30 immediately increased by 13%, to $ 27.4 per pound, according to UxC. Last year, prices have been lingering in the range of $ 24–26 per pound.

The change in quotes can be explained by tough measures to combat coronavirus. Last week, Canadian Cameco closed the world's largest Cigar Lake mine in Canada with a capacity of 6.9 thousand tons per year (13% of world production) for at least four weeks. In Namibia, due to the overlap of territories against the backdrop of a pandemic, problems arose with production at the Roessing and Husab mines (total capacity of about 5 thousand tons per year). And Kazakhstan's Kazatomprom has already announced that it did not exclude the adjustment of plans for uranium mining in 2020.

The price increase occurred because the closure of the deposits was unexpected, the market did not have time to prepare for a reduction in supplies. The closure of mines will reduce production this year, which will reduce part of the uranium reserves in the market, while the demand for uranium will not undergo major changes.

source: mininmx.com




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