Japan’s nuclear utilities are selling off uranium fuel, according to an exclusive Reuters report, which suggests that Japan will not be aggressively restarting many of the nuclear plants shut down in 2011 after the Fukushima disaster. The country has large nuclear fuel holdings and will be selling into a depressed market, so the nuclear utilities will be seeing large balance sheet losses. But they will be clearing out expensive inventory unlikely to be used.
Reuters said the small number of sales so far have come at well below their purchase price, which is supported by the long-term trend in worldwide uranium prices. Uranium isn’t traded on open markets, but in bilateral sales tracked by firms such as UxC and TradeTech. According to several price trackers, including the NYMEX futures market, the spot market price of uranium has fallen from about $40/pound of U308 at the beginning of 2015 to about $24 today.
Tokyo Electric Power Co. (TEPCO), owner and operator of the devastated Fukushima station, in 2017 cancelled a uranium supply contract with Cameco, the Canadian uranium mining giant. Cameco sued, asking for $700 million in damages. An international tribunal in July awarded Cameco $40.3 million in damages.
Japan’s selling off nuclear fuel suggests that the estimate of the Uranium Committee of the American Association of Petroleum Geologists, released in May, may be optimistic. The committee found, according to analyst James Conca, who was a member of the committee, that “Japan is upgrading and re-starting most of its fleet of nuclear power plants after Fukushima.”
Prior to the Fukushima multiple meltdowns due to an earthquake and tsunami, Japan had the third largest nuclear power fleet in the world, after the U.S. and France. The country had 54 operating nuclear reactors, generating 30% of the nation’s electric power.
Reuters noted that Japan “is permanently shutting down 40% of its facilities and just nine of the 33 remaining have restarted. With reactors being closed in the United States, Germany, Belgium and other countries, traders and specialists say the [nuclear fuel] market is likely to remain depressed for years.”
— Kennedy Maize