JOHANNESBURG (miningweekly.com) – Uranium spot prices are likely to remain under pressure for the rest of the decade owing to high inventory levels, recycling of already-mined uranium and the slow restart of Japan's nuclear reactors, forecasts Fitch Ratings.
Spot prices for triuranium octoxide have been fluctuating around $35/lb, with the agency not expecting prices to recover to $50/lb for several years.
Uranium prices had been falling since 2011, when the Fukushima disaster prompted the Japanese authorities to shut down all 52 of the country's reactors, while Germany decided to phase out its nuclear power by end-2022.
The first two Japanese reactors came back online in the second half of 2015, but progress to restart other reactors remained slow.
“The extended period of oversupply also contributed to a big build-up in utilities' uranium stockpiles, with European utilities having enough fuel to last three years and Japanese utilities enough for four to five years.
“These stockpiles will help maintain pressure on prices as demand slowly recovers. Secondary sources of previously mined uranium, such as reprocessed nuclear fuel and blended-down highly enriched uranium from dismantled nuclear warheads will also continue to weigh on prices,” Fitch said in a statement.
Given the continued low-price environment, more uranium mining projects were likely to be delayed or cancelled, which could result in undersupply and price increases after 2020.
The long-term prospects for uranium, however, remained positive, with Fitch expecting demand to rise by nearly 45% by 2030, with China, India and Russia the main sources of net new global capacity.