Uranium Update – World’s Largest Uranium Miner Cuts Production; Price Starts to Run

Pandemic related production cuts have translated to the uranium price increasing as the 2020 supply deficit grows. Kazatomprom announced that as a result of COVID-19 countermeasures being implemented in Kazakhstan, 2020 production guidance was reduced by 4,000 tU (~10.4M lbs U3O8e). This production cut along with already announced shutdowns from other producers of at least ~2.4 Mlbs U3O8e (drives our current estimate for 12.8 Mlbs supply deficit in 2020 (Figure 1), which is 6.7% of estimated market demand. It is important to remember that only a few weeks ago we had expected the market to be roughly balanced (~0.2M lb deficit). The sudden and now substantial market deficit has resulted in the spot uranium price increasing 14% since March 23, 2020.