Nicolas Carter is an executive vice-president of uranium at UxC LLC, one of the nuclear industry’s market research and analysis companies. Carter has 21 years of nuclear industry experience. He manages and coordinates uranium consulting projects and products, including The Ux Weekly, Uranium Market Outlook, Uranium Suppliers Annual and Uranium Production Cost Study. During his career he has provided strategic consulting to major commercial companies in the nuclear fuel industry and advised government and international organizations on uranium market and policy issues. He specializes in economic analysis and forecasting, specifically in the areas of worldwide U3O8 production capability, production costs and price projections. He recently spoke with The Northern Miner about his outlook for uranium.
The Northern Miner: Uranium doesn’t really trade like many other commodities, and buyers and sellers typically negotiate contracts privately. Utilities usually buy their fuel in four- to 10-year contracts to lock in the price. Is it true that there have been no significant long term contracts signed in the last two years?
Nick Carter: Uranium does trade in an active spot market, although it doesn’t have the liquidity of many other key commodities, such as coal or oil. In 2018, spot volume consisted of 88.5 million lb. U3O8 from 440 transactions, with 25% of the volume coming from utility purchases. The term market accounted for volume of 90 million lb. U3O8 from 30 transactions in 2018. Among U.S. utilities, average contract lengths for term contracts were much shorter at three years compared to an average of seven years for non-U.S. utilities. Additionally, one non-U.S. utility purchase accounted for 28 million lb. U3O8over 10 years. Term contracting volumes have picked up slightly over the past couple of years, but most of these contracts have continued to be signed at fixed prices or market-related prices (along the forward price curve).
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