The NFRC was established in 2002 to promote the construction and operation of nuclear reprocessing facilities. NFRC promotes reprocessing commercial spent nuclear fuel that is generated by commercial nuclear power plants.

Reprocessing dramatically reduces the amount of high-level radioactive waste that would have to be stored in a geologic repository. We also support reprocessing plutonium and highly enriched uranium from nuclear warheads into fuel for use in commercial nuclear power plants.

Thursday, March 17, 2011

Uranium Spot Market Price Dropping: Probably Temporary

Trading in uranium on the spot market totalled about $2.5 billion in 2010. The Fukushima nuclear plant disaster is probably temporarily changing that picture as hedge funds and banks unload their uranium portfolios.  Explosions and radiation leaks in Japan have worried some traders too, who are dumping their uranium holdings amid fears that the Japanese crisis could stall expansion of the world's nuclear programs.

Almost three million pounds of uranium have changed hands in the spot market this week, five times more than the average volume. The result is that after an 80% run-up over the past eight months, uranium prices have tumbled. They reached a three-year high of $73 a pound in February, but dropped $13 earlier this week and fell to $49.25 on Wednesday, according to Ux Consulting Company. 

At the same time, some utilities and even producers have stepped in to buy the metal in the belief that the demand for more nuclear plants will remain. A total of 65 nuclear units are under construction, mostly in China and Russia. Despite the bearish news in recent days, traders note that more than 400 reactors are still operating, consuming about 180 million pounds of uranium a year.  Nuclear power accounts for 14% of global electricity output

Most of the uranium traded in the physical market is in the form of uranium oxide concentrate, which is several steps away from being used as nuclear fuel. After utilities buy uranium on the spot market, these facilities convert the oxide into a gas form of pure uranium, called uranium hexafluoride. The gas, which is radioactive, is then enriched to become nuclear fuel. It is then transported to fabrication centers to convert into a pellet, which is put into a fuel rod that goes into a nuclear reactor.

NFRC believes the current drop represents a short-term impact and the fundamentals for the market are still very strong. (WSJ, 3/17/2011)

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