First Quarter Market Update

摘要

In last year’s fourth quarter market update, we noted thatrnthe spot price could pull back following the significant jumprnexperienced after Cameco’s announcement in mid-Novemberrnto suspend production from its majority-owned McArthurrnRiver mine. However, shortly thereafter, Kazatomprom announcedrnthat it would reduce planned Kazakh production byrn20% under subsoil use contracts of company enterprises forrnthe 2018 through 2020 period. The market reacted favorablyrnto this news, and the spot price quickly jumped from $22.00rnto $26.50 in early December before falling back to $23.75 tornclose out the year. Over the first several weeks of 2018, thernspot price has continued to trend lower, falling to a low ofrn$21.50 on February 12. One of the major reasons for the declinernhas simply been a lack of utility demand, partly due tornthe filing of the Section 232 petition by U.S. producers’ EnergyrnFuels and Ur-Energy, which has subsequently resulted inrnsome U.S. utilities taking a wait-and-see approach beforernjumping back into the spot market. Furthermore, many utilitiesrnare still well-covered over the next few years, and whilernadditional production cutback announcements were made inrnlate 2017, the consensus among many utilities is that it willrnstill take considerable time before oversupply is reduced tornmore manageable levels.