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Kazakhstan forecasts volatility on uranium markets till 2020

Business Materials 27 February 2017 12:41 (UTC +04:00)
Kazakh National Wealth Fund Samruk-Kazyna forecasts volatility on the world uranium market till 2020 due to political and economic factors

Baku, Azerbaijan, Feb. 27
By Elena Kosolapova – Trend:
Kazakh National Wealth Fund Samruk-Kazyna forecasts volatility on the world uranium market till 2020 due to political and economic factors, the fund said in a report published Feb. 27.

Kazakhstan is the biggest uranium producer in the world. The country produced 24,000 tons of uranium in 2016.
According to the report, uranium spot prices fell from 2016’s high of $35.38 per lb. in January to $17.75 per lb. as at end-November 2016, their lowest level since February 2005 and recovered to around $20 lb. by year-end as oversupply remained intact.

“The uranium market is expected to remain well-supplied through 2020. As a result, spot prices are projected to stay depressed at lower $30 per lb.,” the report said.
However Samruk-Kazyna expects that very few mines will be developed at the low prices level.
“In the long-term uranium prices will be supported by shortages of supply combined with rising future global demand,” the report said.

Samruk- Kazyna also noted that major American and European nuclear reactors are coming off supply in 2017 and 2018 and will be looking for long-term contracts once again, and this will be price supporting factor as well.
According to the report, currently, demand for uranium is generated by 439 nuclear power stations in the world with a total net installed electricity capacity of 380 GW. In 2015, 28 percent of global demand was from the US. China and South Korea accounted for 12 percent and 8 percent of global uranium demand, respectively.

The report says that the world uranium consumption is projected to grow at an average annual rate of 4.8 percent from 2015 and to total 97,900 tons in 2020. The growth of the demand will be provided by new reactors, as 58 reactors are under construction and 512 reactors ordered and planned. The majority of new reactors is expected to come from developing markets where demand for power is growing rapidly, like China and India.

“The opening of new reactors is expected to more than offset demand declines from reactors being deactivated, which in turn, will help to correct the supply-demand imbalance,” Samruk-Kazyna said.

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