An internal study by nuclear fuel consultant TradeTech has analyzed the market impact of the US Department of Energy's (DOE) recent decision to dispose of excess uranium to fund decontamination and decommissioning (D&D) activities at the Portsmouth uranium enrichment facility in Ohio.
Denver, CO (PRWEB) Nov 20, 2009 -- An internal study by nuclear fuel consultant TradeTech has analyzed the market impact of the US Department of Energy's (DOE) recent decision to dispose of excess uranium to fund decontamination and decommissioning (D&D) activities at the Portsmouth uranium enrichment facility in Ohio.
Under a recent Secretarial Determination, DOE's Office of Environmental Management will be able to transfer up to 300 tonnes of uranium (780,000 pounds uranium oxide [U3O8]) quarterly in calendar years 2009 and 2010 for D&D cleanup at the Portsmouth enrichment facility, so long as the total transfer during that period does not exceed 1,125 tonnes of uranium (2.9 million pounds U3O8).
"For this study, TradeTech relied on its standard short-term uranium price model to project spot prices with and without the D&D transfer program. It is important to note that analysis of active supply and demand data shows that price is more sensitive to variations in active supply than to the same level of variation in active demand," said Dr. R. Gene Clark, TradeTech Chief Executive Officer.
TradeTech assumes for this study that USEC, which leases and operates the Portsmouth facility from the US government, or any other D&D contractor sells the transferred uranium in one spot market action per quarter, and that this uranium is added to the projected values of our active supply for the last month in each quarter, beginning in December 2009. "The resulting impact is a drop of about US$4 per pound U3O8 in the average spot price for 2010 and a decrease of about $7 per pound U3O8 in 2011, compared to prices projected in the absence of this program. In percentage terms, the uranium spot price drops 8% and 14% in 2010 and 2011, respectively," Clark stated.
TradeTech's analysis considers only the uranium disposition for the D&D program, as the other parts of DOE's disposition program were already included in our base analysis.
Note to Editors: Secretary Steven Chu announced on November 12, that the US Department of Energy determined the proposed uranium transfer to fund accelerated D&D activities at the Portsmouth site "will not have an adverse material impact on the domestic uranium mining, conversion, or enrichment industries." TradeTech's short-term uranium price model is based on the historical relationship that spot price has to TradeTech's reported Active Supply and Active Demand, published monthly in the Nuclear Market Review.
About TradeTech:
TradeTech publishes the Nuclear Market Review each Friday evening, which reports the weekly uranium spot market price, uranium trading activity, industry news, and market data. The monthly edition of the NMR, published on the last day of each month, includes TradeTech Market Values (Exchange Value, UF6 Value, Loan Rate, Conversion Value, SWU Value, and Transaction Value) and Mid- and Long-Term Price Indicators, as well as analysis related to these price determinations, supply/demand information, and industry news. TradeTech also publishes The Nuclear Review, a monthly trade publication dedicated to the international uranium and nuclear energy industry.
TradeTech, and its predecessor companies-NUEXCO Information Services, CONCORD Information Services, and CONCORD Trading Company-has supported the uranium and nuclear fuel cycle industry for more than 40 years, and is widely recognized for its expertise in trading activities and its comprehensive knowledge of the technical, economic, and political factors affecting this industry. TradeTech provides expert market consulting, participates in the buying and selling of uranium products and services, and maintains an extensive information database on these industries.
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