Abstract
Economic analysis and market simulation tools are used to evaluate uranium (U) supply shocks, sale or purchase of uranium stockpiles, or market effects of new uranium mines or enrichment technologies. This work expands on an existing U market model that couples the market for primary U from uranium mines with those of secondary uranium, e.g., depleted uranium (DU) upgrading or highly enriched uranium (HEU) down blending, and enrichment services. This model accounts for the interdependence between the primary U supply on the U market price, the economic characteristics of each individual U mine, sources of secondary supply, and the U enrichment market. This work defines a procedure for developing an aggregate supply curve for primary uranium from marginal cost curves for individual firms (Uranium mines). Under this model, market conditions drive individual mines’ startup and short- and long-term shutdown decisions. It is applied to the uranium industry for the period 2010–2030 in order to illustrate the evolution of the front end markets under conditions of moderate growth in demand for nuclear fuel. The approach is applicable not only to uranium mines but also other facilities and reactors within the nuclear economy that may be modeled as independent, decision-making entities inside a nuclear fuel cycle simulator.
Highlights
Unlike other commodities, natural uranium is not traded on an organized commodity exchange market
This paper focuses on the addition of a key feature to the market-clearing model, namely the ability of individual uranium mines to react to short run changes in the U market price
Using the uranium industry as an example, this paper has presented an approach to modeling the behavior of autonomous entities within a simulation of part of the nuclear fuel cycle
Summary
Natural uranium is not traded on an organized commodity exchange market. The uranium market mainly works on fixed long term supply contracts based on direct negotiations between uranium mine operators and facilities. The corrections are tied to the spot market price, which is based on current supply and demand and subject to speculative effects. 80% of all uranium has been sold under long term contracts and 20% of all uranium by spot market price [1,2,3]. The objective of this work is to extend an existing market clearing model of the uranium and enrichment industries [4]. This model analyzes the impact of new technologies as well as inventory management policies on the uranium market
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