One of the world's largest uranium producers does not see low uranium prices in the future. Canadian Cameco believes that the products will not fall below the prices of 2023-2024, $ 70 per pound, and may rise to $ 130.
Canadian Cameco does not see low uranium prices either in the near future or in the long term. There is not enough capacity to meet the growing demand, according to one of the world's largest uranium producers. And the ban on the import of Russian low—enriched uranium to the United States is one of the reasons.
"The question is, how easy will it be to abandon it (Russian uranium) in the period up to 2028? This causes some uncertainty in the market or, let's say, some pause on the part of some fuel buyers. But if you step aside and look at the overall dynamics, you will see that market contracts are valued at the lowest level of $ 70 a pound, while the ceiling is $130. If you choose the midpoint between the minimum and the maximum, you will get uranium at a three-digit price. This is $100 worth of uranium," Grant Isaac, vice president and chief financial Officer of Cameco, said at a teleconference with investors.
The minimum price, which he named, seemed unrealistic even before the autumn of 2023, when threats to impose sanctions on Russian products began to grow and more and more countries began to appear around the world that announced plans to actively develop nuclear energy.
In November, according to UxC and TradeTech, the spot price of uranium was $ 77.13 per pound, and under a long—term contract - $81.5. In January, quotes reached $ 100. While back in 2021, the quotes did not rise above $ 42. And in 2020, they dropped to $ 24.
"Globally, there is not enough supply capacity and availability to meet demand, as it is growing in a very specific and predictable way. This is ultimately what will determine the prices. When you see a structural gap, it's a one-way trade. We need higher prices to stimulate investment to create primary production that will fill this gap. This is quite clear. It's inevitable," said Grant Isaac.
As he noted, consumer companies, with a decrease in spot prices, believe that future lows and highs are also decreasing.
"Our vision is that the situation in the spot market, in which someone unsuccessfully sold 50,000 pounds, has nothing to do with the price of uranium in two years and beyond," added the vice president of Cameco.
In August, a ban on the import of low-enriched uranium from Russia in the USA. Russia is not a major uranium producer, but it accounts for more than a third of the global enrichment and conversion market. Washington has included exceptions to sanctions until 2028 in the ban, which American companies receive. However, in Russia in November also imposed a ban on supplies to the United States. Exceptions are also possible — in the form of one-time licenses.
In such a situation, the plans of many countries to actively develop nuclear energy, which will require large additional uranium reserves, are more effective on the market.