Uranium is soaring
Uranium surged the most in more than three weeks as Kazakhstan said it will reduce production by 10% this year after prices slumped in 2016 amid a global inventory glut.
Spot uranium rose $2.25, or 10%, to close at $24.25 a pound on Tuesday, the highest level since September, according to data from Ux Consulting Co. Prices have gained 19% this year. The announcement from Kazakhstan, the world’s biggest producer, may mark an inflection point for the market, according to Cantor Fitzgerald LP. The cuts could lead to higher prices, according to Ux, a provider of research on the nuclear industry.
“We had given up on expecting Kazakhstan to exercise production restraint as its mines were the lowest cost operators in the world,” Rob Chang, head of metals and mining at Cantor Fitzgerald in Toronto, said in a note. “This news is a definite surprise and may be the inflection point for the uranium space to head higher across the board.”
Spot uranium averaged about $26 a pound last year, according to data from Ux. Prices are forecast to average about $23 in 2017, according to the median forecast of analyst estimates compiled by Bloomberg in December.
Kazatomprom’s output cut is equivalent to about 3% of global production in 2015, the company said, citing Ux data.