The Energy Report Examines How Energy Fuels Provides 'Strong Leverage to Potentially Increasing Uranium Prices'
SAN FRANCISCO, CA--(Marketwired - February 27, 2017) - Uranium has risen 30% from the very low prices of late last year and a trio of analysts agrees that Energy Fuels is in position to take advantage of a rising price environment.
Included in this article is: Energy Fuels Inc. (TSX: EFR) (NYSE MKT: UUUU)
Uranium's 30% rise from the low of $17.75/lb on Nov. 30, 2016, is fueled by a number of supply and demand factors that has industry watchers optimistic that the tide has turned. On the supply side, Kazakhstan's state-owned Kazatomprom announced in January that it would cut production by 10%; the company supplies 40% of the world's uranium. The company also announced the opening of a trading office in Switzerland. That could help placing the material in the market on a more orderly basis. Justin Chan, an analyst with Numis Securities, told Proactive Investors that "Kazatomprom's establishment of Swiss marketing arm suggests that inventory management may become a policy tool. An inventory policy rather than direct supply would see it act as more of a swing producer or swing seller, using inventory and production levels to influence the uranium price."
Industry watchers also found hope in Rick Perry's Senate confirmation hearings as U.S. Secretary of Energy in January when he said that he would take a hard look at the Department of Energy's practice of bartering uranium. This bartering is believed to place between 5 and 8 million pounds of uranium into the market annually.
On the demand side, there are currently 60 nuclear reactors under construction worldwide and another 160 planned, according to the World Nuclear Association, and existing reactors are having their lives extended. In the U.S., "over 75 reactors have been granted license renewals which extend their operating lives from the original 40 out to 60 years, and operators of most others are expected to apply for similar extensions," reports the Association. In December, the state of Illinois passed a bill providing subsidies for the operation of three reactors run by Excelon; the reactors had been expected to shutter in 2017 and 2018.
Macquarie Bank analysts wrote in a Jan. 20 report, "With the closure of a large number of nuclear power plants announced earlier in 2016 on economic grounds, legislative actions in New York and Illinois keeping some of these open will provide both more optimism and spot market demand into 2017."
Additionally, it is believed that the Trump administration's pledge to make the U.S. energy independent will encourage the development of more nuclear power reactors.
Energy Fuels Inc. is positioned to take advantage of the rising tide for uranium by continuing to explore and develop its properties. On Feb. 17, it reported that the Environmental Protection Agency (EPA) issued an aquifer exemption for the Jane Dough wellfield at the Nichols Ranch project in Wyoming; this allows for future in situ recovery. The wellfield, according to the company, is important in sustaining "long-term uranium production at Nichols Ranch. . .once all thirteen header-houses in the Nichols Ranch wellfield have been constructed, the Company expects to advance production into the Jane Dough wellfield, which will be connected to the Nichols Ranch Plant."
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