31 Jul (NucNet): Prices and demand in the uranium market remain flat because of oversupply, but the long-term outlook for nuclear energy is positive, underpinned by strong fundamentals, Canada-based uranium producer Cameco said.
Reporting its second-quarter financial results yesterday Cameco said it is “performing well” despite some supply disruptions in the first half of 2015.
Chief executive officer Tim Gitzel said the company has focused on keeping costs down and running operations safely and efficiently to ensure flexibility to respond to market conditions as they evolve.
Cameco reported a 23 percent increase in revenues to CAD 1.13 billion (about US$868m, €793m) and a 16 percent increase in gross profit to CAD 282 million for the first half of 2015 compared to the same period in 2014. Adjusted net earnings remained unchanged at CAD 115 million.
The company said no significant trends in the price of uranium have emerged in the first six months of 2015, with market prices remaining around US$35 per pound.
Cameco said the most important driver of market sentiment in the short term is Japan’s decision to restart reactors. “While the market has been disappointed with ongoing delays, the first reactor restarts appear to be imminent,” Cameco said.
Fuel loading was completed at Japan’s Sendai-1 in July 2015 and the unit is expected to restart in August, while Sendai-2 is expected to follow in the autumn.
Cameco said the depressed market conditions do not justify the development of new uranium supply projects. The decision in June 2015 by mining corporation Rio Tinto to cancel a planned expansion of its Ranger uranium mine in Australia’s Northern Territory from the project supports this view, Cameco said.
Beyond short-term challenges in the market, longer term plans underpin a positive outlook for the industry, Cameco said. The company said there is an increase of 82 reactors expected to start operation over the next 10 years, with China and India leading the way in new-builds.
In April 2015, Cameco signed a uranium supply deal with the Department of Atomic Energy of India to provide 7.1 million pounds of uranium concentrate under a long-term contract until 2020.
