Is It Time for a Melt-Up in the Uranium Sector?by Eric Fry
The news that jolted the uranium sector to life a few days ago was a surprising announcement from Russia.
One week ago, the Russian national parliament (the State Duma) introduced a draft law that calls for stopping international cooperation in the nuclear and aircraft industries with not only the U.S. but also "other foreign states" that support U.S. sanctions against Russia and "those who support Washington's position on Syria."
This new legislation could become law as early as this week. If so, the U.S. utility industry could be in for a bit of a shock. The U.S. generates about
20% of its electricity from nuclear power, and it
imports about 40% of its uranium requirements from Russia, Kazakhstan and Uzbekistan.
The U.S. Energy Information Administration provides the following details:
The United States imports most of the uranium it uses as fuel. Owners and operators of U.S. nuclear power reactors purchased the equivalent of 50.6 million pounds of uranium in 2016 [2017 data are not yet available]. About 11% of the uranium delivered to U.S. reactors in 2016 was produced in the United States and 89% came from other countries.
Sources and shares of purchases of uranium produced in foreign countries in 2016:
Canada - 25%
Kazakhstan - 24%
Australia - 20%
Russia - 14%
Uzbekistan - 4%
Malawi, Namibia, Niger and South Africa - 10%
Brazil, Bulgaria, China, Czech Republic, Germany and Ukraine - 2%
Eventually, supply reductions matter... especially when the prospect of large future supply disruptions becomes a credible risk. That moment in the uranium market may have arrived.
Source: The Oxford Club
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