Pigeons

For those following the goings on in the uranium space which, given the dearth of coverage in the mainstream media suggests not that many, recent events have been, well, quite something. As nations go all in in nuclear, last Friday’s announcement by industry heavyweight Kazatomprom that they don’t have enough to fulfil their obligations, put the cat right in amongst the pigeons. The problem is that the world’s largest producer has promised all sorts of people deliveries that they, now, cannot pony up on. Spot prices surged. Like properly surged, smashing through $100/lb and kept on going. The reason is the knock-on effect it’ll have. Not only will Kazatomprom likely now have to wade into the spot market to secure promised lbs, but so too all those expecting delivery. All the JVs and partners, and hangers on. They too are likely thinking they better get busy, lest they walk in one morning to a curt email from their man at KAP saying they’ve missed out. DHL aren’t coming anymore. And what about all those nuclear fuel buyers at the utilities who have deals with KAP and all the other partners scattered across the world. Are they going to carry on with a leisurely turn through the Racing Post as prices surge further? Not likely. Nuclear utilities can’t afford any disruptions to their chain of reactor fuel conversion and enrichment contracts across the fuel cycle. So, they too will be looking to avoid what would be a very sticky conversation with the line manager by getting a jig on. Analysts have been writing for some time about the chronic supply / demand mismatch in uranium, talking of a ‘chaotic’ move to the upside. Let the chaos begin.