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Situation in the global NFC product and services market

The main factor of demand in the world market of products and services from the nuclear fuel cycle is the scale and rate of global nuclear power development.

In 2013, in the segments of the global uranium market that are most significant for JSC Techsnabexport, specifically, natural uranium, and natural uranium conversion and enrichment, the situation was affected by persistent negative pressure due to the Fukushima-Daiichi accident’s consequences, as well as the impact of factors specific to each of these segments.

In spite of continuing moderate downward pricing in both spot and term segments of the natural uranium market, the situation can be described as comparatively stable. Global natural uranium production grew by 3% compared to 2012, increasing to a total amount of approximately 59,000 tU. Kazakhstan was still the major producer of this material, pushing Canada and Australia to the second and third places. In the reporting year, Kazakhstan produced 22,500 tU, while Canada and Australia produced 9,300 tU and 6,300 tU, respectively.

Due to the resumption of operations at Honeywell’s plant (ConverDyn) in the USA, the world volume of uranium conversion services has somewhat increased. However, the drop in demand in this market segment, as well as a sufficient supply from secondary sources, still forces producers to operate their conversion plants at a substantial underutilisation of capacity.

In 2013, in the segments of the global uranium market that are most significant for JSC Techsnabexport, specifically, natural uranium, and natural uranium conversion and enrichment, the situation was affected by persistent negative pressure due to the Fukushima- Daiichi accident’s consequences, as well as the impact of factors specific to each of these segments.

In the uranium enrichment services market, the main factor is still the transition from gaseous diffusion to gas centrifuge technology, which is nearing completion. In this context, the most significant event was USEC decision, made in May of the reporting year, to cease operating its gaseous diffusion plant in Paducah (USA) and to reform its American Centrifuge project into a research, development, and demonstration work programme. Suffering from financial difficulties, USEC Inc. announced a plan for massive restructuring of its debt in December 2013, including the re-issuing of the Company’s shares and a change in the shareholders composition through voluntary bankruptcy without the liquidation of assets.

Global Laser Enrichment reached an agreement with the US Department of Energy to hold exclusive negotiations on the construction and operation of a commercial facility for the re-enrichment of depleted uranium hexafluoride inventories at Paducah using laser uranium enrichment technology (SILEX).

In France, AREVA, and in the USA, URENCO, continued building up the capacities of their gas centrifuge plants.

On the whole, in 2013, the world market of NFC products and services demonstrated a continued downward pricing, primarily in the spot sales segment. Therefore, the monthly spot indicator for natural uranium in the form of U3O8 dropped over the year from US $44 to US $34.5 per pound of U3 (hereinafter, information from Ux Consulting Co. LLC is used), while the long-term price went down from US $56 to US $50 per pound of U3O8. Uranium enrichment pricing also decreased: the spot price fell from US $119 to US $99 per SWU (separative work unit), while the long-term price fell from US $134 to US $114 per SWU. In North American and European markets, the spot conversion prices continued to drop (from US $10.5 to US $8.5 per kgU and from US $11 to US $9 per kgU, respectively). The same was seen in the long-term conversion prices (dropping from US $16.75 to US $16 per kgU for North America and from US $17.25 to US $17 per kgU for Europe).

3 According to Ux Consulting Co. LLC, uxc.com


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