Thank you for that.
Two parts i liked most "According to the WNA, the annual requirement for the current reactor fleet is 169 mmlb of uranium. The primary supply is 161 mmlb and the secondary supply is 28 mmlb, meaning that the market is oversupplied:"
My quick sums on those number
1-McArthur River and Key Lake removing over 18 million pounds per year (
based on 2016)
2-Kazatomprom scheduled cuts will be enacted for a period of three years commencing January 2018. This will result in the production deferral of 11 thousand tonnes over the period, of which an estimated 4 thousand tonnes in 2018 alone representing approximately 7.5% of global uranium production for 2018 as forecast by UxC (UMO Q4).
Link
3-PDN Langer Heinrich Mine is in care and maintenance removing 3,1373,800 (
last 4qtrs)
Known Reductions
Cameco 18000000
Kazatomprom 3137800
PDN 8000000
29,137,800
29 million jumps out at me. Clearly some numbers are wrong or it is already under supplied WNA quoted at 169 mmlb of uranium used. Supply 161 mmlb and 28 mmlb giving 169 used and production 189 mmlb is excess of just 20mmlb
We all know and have seen PEN buying in U at a cost below its own production to met its supply contracts.
It would seem stupid to assume PEN and others with supply contracts priced well over the current spot price would
not take the spot price supply which is cheaper than production cost "Keep in mind that the break-even cost for most uranium mines is estimated at between $40 and $50 per pound."
Checking Actual used U -
68,000 tonnes of uranium from mines or elsewhere each year.
149,914,350lb (seems to be 2014)
Getting busy with my own maths again to fuel use
Reactors quoted "With a typical burn-up of 45,000 MWd/t, (Megawatt day per tonne) one tonne of natural uranium made into fuel " and "Total nuclear electricity supplied worldwide in 2016 was 2490 billion kWh, (2490,000,000MW) about 11.5% of total electricity generated that year." gives some very rough numbers to convert and crunch
2490,000,000MW needing 55333.33333 tonnes (110,666,666.66lb) (2017)
Check the links to the production reductions and do your own maths. Check the actual supply contacts and do some more maths (I have not linked in this post).
Love to be in the negotiation rooms for long term supply contract renewals
Interesting note is the actual U fuel cost is often quoted as a very minor overall cost consideration for the the reactors. It is a very big issue for our share holdings of course.
Above is not anything more than some maths fun. DYOR and have a great weekend.
(20min delay)