Plateau Energy Metals Inc. PLUUF

TDW Uranium weekly

[MrBigger]

Ux Consulting's (UxC) spot uranium price indicator declined by $0.30/lb this week to $23.10/lb (-1.28%). UxC noted downward pricing pressure as several sellers became more active in the market following recent spot price strength. Kyushu restarts Japan's ninth reactor; TEPCO considers decommissioning Fukushima Daini - On June 16, Kyushu Electric Power Co. restarted the Genkai Unit 4 reactor in the Saga Prefecture marking the ninth restarted reactor in Japan postFukushima. On June 14, TEPCO President Tomoaki Kobayakawa stated that the company is considering the decommissioning of the four boiling water reactor units at the Fukushima Daini plant. The company is already undergoing decommissioning work of the six reactors at Fukushima Daiichi plant. We estimate that there are currently eight reactors operating in Japan, with one restarted reactor (Ikata Unit 3) blocked by a local court injunction. Spot market activity has slowed; volumes remain well above the five-year average - Over the past week, UxC reported spot volume of 1.4mmlb under seven transactions. The total year-to-date (YTD) spot volume of 32.8mmlb, is well above five-year average volume for a similar period of ~21mmlb. Term market remains quiet despite recent buzz in the spot market - Total term market volume year-to-date is ~11 million pounds, which compares to ~54 million pounds at this time last year. No new contract awards or demands were reported last week but several utilities continue to seek material in the term market. As discussed in past notes, we believe the uncertainty over potential trade actions (notably, the U.S. Section 232 petition) and its possible implication on domestic fuel requirements/ supply has essentially frozen longer-term procurement activities by U.S. fuel buyers. In our view, the hesitance of U.S. fuel buyers to transact in the term has also led other market participants to become further entrenched in their 'wait and see' approach. We forecast a potential supply deficit of ~6 million pounds in 2018. We believe the market could return to supply surpluses in 2019 and 2020 of 14mmlb and 10mmlb, respectively, however, these forecasts hinge on the assumption that the Cameco's McArthur River mine (18-19mmlb of annual production) will be restarted at the end of 2018 and Kazakh production returns to 23,000t U in 2019 and 2020. We expect Cameco could make a decision on the status of the McArthur River/Key Lake operations by late summer 2018. If the current curtailment is extended, we believe the market could remain in deficit in 2019.