Uranium Supply, Demand & Prices IAEA Technical Meeting on Optimization of In Situ Leach (ISL) Uranium Mining Technology 15-18 April 2013, Vienna Tom Pool International Nuclear, Inc.
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Uranium Supply, Demand & Prices
IAEA Technical Meeting on Optimization of In Situ Leach (ISL) Uranium Mining Technology
15-18 April 2013, Vienna
Tom Pool International Nuclear, Inc.
The Market For Uranium
• Demand
• Supply
• Prices
• Fukushima Effect
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1956 1966 1976 1986 1996 2006
tU p
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Historical World Uranium Requirements
Uranium Demand • Existing reactors: 435 in the world, 104 in US
– Retirements: Minimal In US – Life Extensions
• US 73 20-year Extensions Granted • US 13 Applications Filed • US 17 Applications Expected
– Uprates • US 8,800 MWe 1977 - 2016
– Outages • Refueling – Decreasing Duration • Unplanned – Declining pre-Fukushima • Capacity Factor
– US topping out at 90% +
• New Reactors: 65 under construction – Initial Cores – Periodic Refuelings
• Fukushima Impact – Japan: 48 reactors offline indefinitely – Early Shutdowns: Germany, Switzerland, Taiwan & Belgium
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2010 2015 2020 2025 2030
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Uranium Requirements - Japan
WNA 2009 WNA 2011 iNi 2013
Fukushima Impact – Japanese Requirements
• WNA 2009 Requirements Forecast for Japan – 2010 to 2030: 220,357 tU
• WNA 2011 Requirements Forecast for Japan – 2010 to 2030: 149,852 tU
– Net Loss = 70,505 tU
– @ US$50/lb U3O8 = US$9.2 Billion
• iNi 2013 Requirements Forecast for Japan – 2010 to 2030: 124,715 tU
– Net Loss = 95,642 tU
– @ US$50/lb U3O8 = US$12.4 Billion
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2010 2015 2020 2025 2030
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World Requirements - Future
WNA 2011 IAEA 2012 Low IAEA 2012 High
3.3%/yr
2%/yr
4%/yr
Uranium Resources - IAEA
• 373 Deposits
• ~15 Million tU (200+ years at the current rate of consumption) – Includes some deposits currently politically
inaccessible
– Includes substantial phosphate by-product: 2.7 Million tU
– Includes some black shale: 0.2 Million tU
– Does not include seawater: ~38 Million tU
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Uranium Production - World
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U3O
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Price - Production Relationship - World
Production Price
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Uranium Production & Consumption - World
Consumption Production
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tU World Inventory
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World Uranium Production By Method
b-p conv isr
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1950 1960 1970 1980 1990 2000 2010
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World By-Product Output Of Uranium
S. Africa - Au S. Africa - Cu US - Cu US - P2O5 Australia - Cu
Mega-Projects
• Cigar lake – 6,300 tU/year – 2013/2014
• Imouraran – 5,000 tU/year – 2015
• Husab – 6,500 tU/year – 2016
• Yeelirrie – 2,900 tU/year - ???
• Midwest – 3,500 tU/year - ???
• Trekoppje – 3,000 tU/year - ???
• Etango – 2,300 tU/year - ???
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World - Scheduled Uranium Production
Other
Uzbekistan
United States
Ukraine
Russia
Niger
Namibia
Kazakhstan
Canada
Australia
Secondary Supply
• Inventory (Natural): Net Increase – Government: Almost Gone – Producers: Need to accumulate as production increases – Consumers: Need to accumulate as consumption increases – Hedge Funds/Speculators: Accumulating as in almost all
commodities and adding volatility
• Spent Fuel Reprocessing: Increasing • Government/Military – HEU – Plutonium – MOX:
Declining • Depleted Uranium: Increasing • Price Sensitivity: Relatively Low (Politically driven)
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Secondary Supply Sources - Projected
Spent Fuel Govt/Mil DU
Supply – Demand Balance
• Demand
– Post Fukushima Dip/Pause
– Long-term growth at 2 - 4% per year
• Supply
– Oversupply in the near-term
– Financing difficulties for “juniors”
– Project cancellations & deferments
– Increased competition for sales
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Supply - Demand Balance -Projected
Production Secondary Supply Requirements
Prices
• The 2007 price bubble was driven by speculation and manipulation. – Uranium spot price is very easy to manipulate because the
market is so thin – Hedge fund buying has taken over 10 M lbs out of the
market
• The 2007 price bubble dislocated production costs – Producers had very high expectations for future prices
• Lowered cut-off grades • Increased wages • Catch-up on maintenance • New equipment • Overall: A higher standard of living
$50
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4-Feb-11 18-Feb-11 4-Mar-11 18-Mar-11 1-Apr-11 15-Apr-11 29-Apr-11 13-May-11
$ p
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d U
3O
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Uranium Spot Prices - Fukushima Effect – Short-Term
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Uranium Prices – Post-Fukushima
Fukushima Effect Uranium Share Prices - Immediate
Company 8-Mar-11 15-Mar-11 Loss
Cameco $38.16 $29.30 23%
Paladin $5.00 $3.26 35%
Uranium One $6.02 $3.55 41%
European Uranium $1.50 $1.00 33%
Ur-Energy $2.57 $1.49 42%
Uranium Energy $5.63 $3.36 40%
Fukushima Effect Uranium Share Prices – Longer-Term
Company 8-Mar-11 2-Apr-13 Loss
Cameco $38.16 $20.87 45%
Paladin $5.00 $1.00 80%
Uranium One $6.02 $2.78 54%
European Uranium $1.50 $0.30 80%
Ur-Energy $2.57 $0.95 63%
Uranium Energy $5.63 $2.11 63%
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Uranium Price & Stock Indices
Uranium Price Index Uranium Stock Index
Prices & Costs
• Prices and costs are related – Ranger 2005: Cost = $16.66 per pound U3O8
– Rossing 2005: Cost = $16.07 per pound U3O8 • Uranium Price 2002-2004 = $13.26
– Ranger 2010: $66.74 per pound U3O8
– Rossing 2010: $62.63 per pound U3O8 • Uranium Price 2007-2009 = $70.35
• Higher prices mean higher costs – Decrease in cut-off grade
– Higher standard of living
Prices - Future
• Volatility due to speculation and manipulation
• Oversupply in the near- to mid-term
• Producer difficulty in lowering costs and, hence, sales prices
• Increasing regulation and NGO intervention increases costs and, hence, prices
• Overall: Conflicting pressures, but weakness likely in the near-term and gains in the mid-term as the Fukushima effect fades
Conclusions
• Demand – Stagnating
• Supply – Abundant resources, increasing competition
• Prices – Stagnating to weaker
• Companies – Difficulties raising financing
• Fukushima Effect – Revitalization of NGOs throughout the world and a 3 to 5 year setback for the nuclear industry
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