World’s biggest uranium producer cuts output as uncovered demand nears one billion pounds
Yesterday morning Kazatomprom, the world's largest producer, announced that it is reducing 2017 planned uranium output by 10%, which is about 3% of annual global output.
In an interview with UxC, Askar Zhumagaliyev, chairman of Kazatomprom, said: “This supply response is taking place while the projected uranium demand is increasing at a rate of 2-3% per year and the uncommitted reactor requirements of utilities are rapidly increasing. In fact, these currently unsecured uranium needs total almost 1 billion pounds U3O8 over the next ten years.”
Cantor Fitzgerald has said that if this reduction were to remain in place for three years the supply/demand deficit will increase from next year onwards. Commenting on the news, Cantor said its “very positive” for the market, adding that “it may be the inflection point for the uranium space to head higher across the board.”
As production from Kazakhstan is reduced, demand increases, particularly from countries such as China. China is continuing with its Five-Year-Plan to double its nuclear capacity and is spending US$570 billion targeting 10% of its electricity generation from nuclear.
In December, UxC reported that several utilities had entered the market and Berkeley Energia is experiencing growing interest from US and Asian utilities seeking offtake contracts.
The uranium price, which has been at historic 12 year lows, is reacting to this news and the spot price is up nearly ten per cent in the past week alone. Company share prices are also reacting accordingly, industry leader Cameco (CCJ.T) is up 43% in the past two months and Berkeley Energia (BKY.L) has seen a 37% increase in share price over the same period.
Berkeley Energia Managing Director Paul Atherley commented “As the Salamanca mine moves into construction it’s very encouraging to see the market tightening ahead of this growing demand from uncovered utilities.”
|
|
|
|
|
|
|
