Uranium spot price jumps on investor activity, Kazakh unrest

The uranium spot price rose more than $3 Jan. 5 as purchases by market participants responded to news that the Sprott Physical Uranium Trust was again raising funds for its own purchases and concerns that unrest in Kazakhstan could affect production.

S&P Global Platts assessed the current month spot price of U3O8 to Canada at $45.50/lb 1 pm ET Jan. 5, up $3.25 from $42.25/lb assessed Jan. 4.

That is the largest increase since the price rose $3.75 Sept. 15 and the highest price since Nov. 30, when Platts assessed U3O8 for current month delivery at $46.30/lb.

As much as 1 million lb traded Jan. 5, most of which was bought by participants other than Sprott, according to market sources. Deals heard ranged between $42.75/lb and $45.50/lb.

Some participants suggested that unrest overnight in Kazakhstan spurred the uptick in purchases. Some 40% of global uranium supply is produced in the country.

News on the country's political and social unrest "has broken, and that's got people buying," a fuel buyer said in an interview Jan. 5.

Kazakh social unrest "is a part of" the price jump, an intermediary said in an interview Jan. 5.

"At this stage, [mining] activity is not suspended on the Katco sites, which are very isolated, far from the ... demonstrations," a spokesperson for France's Orano said Jan. 5. The French fuel cycle company co-owns the Katco production sites in Kazakhstan with state-controlled Kazatomprom.

"At this point we haven't seen any production impact at Inkai [uranium production site] and don't currently anticipate an impact on deliveries," Cameco spokesperson Jeff Hryhoriw in a statement Jan. 5. Cameco, the world's second-largest uranium producer, co-owns the Inkai uranium operation with Kazatomprom.

"The protest is obviously an evolving situation that our team in Kazakhstan is monitoring closely, and on which they are keeping us closely updated," Hryhoriw said.

Given that the country produces 40% of the world's uranium, "any disruption in Kazakhstan could, of course, be a significant catalyst in the uranium market," he added. "If nothing else, it's a reminder for utilities that an overreliance on any one source of supply is risky. It also reinforces the shift in risk from suppliers to utilities that has occurred in this market."

John Ciampaglia, CEO of Sprott Asset Management, said uranium market participants are watching events in the country closely for signs of supply chain risks.

"It seems to us that the social unrest is happening in the cities and the uranium deposits are obviously far away from those cities. But everything has to move around by truck and boat, and if those supply routes got impacted it could create delays," Ciampaglia said in a Jan. 5 interview.