May 26 Uranium week: production reduction

By Greg Peel / May 26, 2020 / / Article Link

Weekly Reports |May 26 2020

A report of significant reduction in US uranium production over 2019 and into 2020 had uranium spot prices back on the move again last week.

-Big reduction in US 2019 production of uranium-Big reduction in US March quarter 2020 production-Kazatomprom still in lockdown-Spot price hits a four-year high

By Greg Peel

According to a report released by the US Energy Information Agency last week, US uranium production in 2019 totalled 170,000lbs U3O8, down -76% on 2018.

Total shipments of uranium concentrate from US producers were 190,000lbs in 2019, -87% less than in 2018. The EIA noted that total employment in the US uranium production industry was 265 full-time person-years last year, a -29% drop from 2018 and the lowest level since 2003.

Exploration employment was 40 person-years, a -48% decrease from the 2018 total, while mining employment was 48 person-years, a -56% decrease from 2018.

Earlier this month, the EIA reported that production for the first quarter of 2020 totalled 8,098lbs U3O8, down -79% from the fourth quarter of 2019 and -86% lower than the first quarter of last year.

Before any lockdowns. One can only ponder to what extent 2020 production will drop below 2019 production.

The Response

The state of Wyoming accounted for the majority (55%) of total employment in the US uranium production industry in 2019, up slightly from 53% of total employment in 2018. It's thus of little surprise last week a bipartisan group of US Senators, led by the Republican Senator of Wyoming, who also happens to be chairman of the Senate Committee on Environment and Public Works, sent a letter to the US Department of Commerce, as industry consultant TradeTech reports.

The letter called on the Department to extend the Russian Suspension Agreement (RSA), as recommended by President Trump's Nuclear Fuel Working Group. The Senators called for the DoC to reduce imports of Russian uranium, protect America's energy and national security interests, and to limit Russia's ability to manipulate America's uranium markets.

One of the recommendations of the Working Group was to extend the RSA, which sets quotas on imports of Russian uranium into the US, to ensure that the front end of the US nuclear fuel cycle is not materially impacted by imports of uranium at less than fair market value.

The current RSA, which has been amended several times since the original 1992 agreement, expires at the end of this year, and is under review by the DoC. The Agreement currently sets a maximum cap for imports of Russian uranium at 20% of the US market.

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