Weekly Reports |Apr 14 2020
Kazatomprom has moved to formalise virus-related production shutdowns across its operations, sending uranium spot prices higher still.
-Kazak restrictions impact uranium production-Cameco moves to shutter more facilities-spot and term prices on the move in response
By Greg Peel
The Kazak government has imposed measures which now cover all of state-owned Kazatomprom's regions of operation, order to stop the spread of the virus. This has led to a reduction in staff at mine sites and a three-month period of reduced recovery operations, hence lower uranium production.
Kazatomprom is working with its joint venture partners, which include Canada's Cameco, on "assessing the full impact and detailed implementation of this decision across all of Kazakhstan's uranium mines," industry consultant TradeTech reports.
Based on threes month of reduced operations, Kazatomprom expects Kazakhstan's 2020 total production volume to decline up to -10.4mlbs U3O8 from the previous forecast of 59.1-59.3mlbs U3O8, although it noted the impact on production may vary from this estimate.
The company nevertheless does not expect reduced production to impact on 2020 sales obligations which can be satisfied from stockpiled material. It will however impact on joint venture partners, given their respective shares of production will be hit. Cameco has announced an expected loss of -600,000lbs U3O8.
Meanwhile, Cameco continues to shut down its Canadian operations. Added to the company's list of shuttered mines and mills last week were the company's Port Hope UF6 conversion facility in Ontario, thus forcing the closure of the Blind River UO3 refinery, UO3 being required to produce UF6.
The plants will at this stage close for four weeks and summer maintenance will be brought forward where possible.
Price Pressure
Traders getting in on the act, and producers requiring to purchase material in the spot market to satisfy contracts, continue to push spot prices higher as supply dwindles. A number of utilities were also active on the buy-side last week.