Uranium Market Research Articles

A Mine-Based Uranium Market Clearing Model

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.

China and the Global Uranium Market: Prospects for Peaceful Coexistence

China's recent reemergence has resulted in a significant increase in the global demand of commodities and is already having major impacts on the dynamics of global commodity markets. In the case of the global uranium market, we stand at the very beginning of a period of change. However, interesting trends are already emerging. Whereas China has had many policy reversals, and some difficulties in taking control of its procurement strategy in other commodity markets, it is seemingly more successful in managing its uranium procurement strategy. Why? The argument presented here is that a mixture of domestic and international level variables has allowed China more room for maneuver in fulfilling its uranium procurement strategy. On the domestic level, a centralized industry, and, on the international level, a geographically dispersed and uncoordinated market have allowed China to forge ahead with an ambitious civilian nuclear power plan and triple its total uranium imports, all within the span of a few years. Many challenges remain, not the least that of negative public opinion, which has surged since the Fukushima disaster in 2011. Nevertheless, should uranium demand continue to grow, this paper will consider the potential for continued peaceful coexistence among uranium market participants worldwide.

Energy Economics and Policy

There are emerging concerns worldwide on management of energy resources and its development, such as control of the environmental impact of energy use, regulation and expedition of the commercialization of renewable energy, and reevaluation of the safety issue of nuclear power. As a result, theoretical and empirical studies on energy economics and relevant policies are of emergent need to assess the performance of previous efforts as well as to guide future development. Especially, investigations on the characters of energy market and governments' roles in it are of significant implication for decision makers concerning different aspects of energy management. 20 papers selected from 36 submissions are published in this issue, which cover many important topics in the field of energy economics and policy. At the macroscale, P. Massot and Z.-M. Chen review the history of global uranium market and discuss the potential coexistence between the rising market of China and the rest of the world. X. H. Xia and Y. Hu use China's subprovince and prefecture level data to analyze the determinants of electricity consumption intensity. B. Zhang et al. provide an overview of resources use and environmental impact of the Chinese industry during 1997–2006 based on an exergetic assessment. The fossil fuels inputs in China during 2000–2010 are estimated by S. Wang et al. in a material flow analysis which takes hidden flows into account. Acknowledging the importance of infrastructure investment for the Chinese economy, the embodied energy use in China's infrastructure investment during 1992–2007 is evaluated by H. Liu et al. based on an energy input-output model. S. Lee et al. analyze the potential economic and environmental effects of carbon tax in Japan using a global macroeconometric model. In the study by F. Tao et al., the directional distance function and the Luenberger productivity index are applied to measure the industry efficiency and total factor productivity at the level of subindustry in China during 1999–2009. By employing an input-output model, S. Guo et al. construct an embodied greenhouse gases emissions inventory for Beijing. Fuel consumption and exhaust emissions, including nitrogen oxides and particulate matters, by China's auto industry are estimated and related mitigation policies are discussed by Wu et al. In P. Dai et al.'s paper, an integrate optimization model is proposed for mitigating carbon dioxide emissions from the power sector of China. Other efforts are devoted to energy systems at smaller scales. In the light of the concept of low-carbon community, S. Song et al. propose a life-cycle-based accounting framework for carbon dioxide emissions and employ it to a case in Beijing. As an efficient mode to organize modern production, the industrial park attracts special attentions not only for its important role in economic development but also for its highly concentrated energy use. Four papers in this issue discuss different aspects of the industrial park: the sustainability performance of the industrial park is evaluated based on a life-cycle multicriteria framework by J. Yang et al.; the carbon metabolism of the industrial park is simulated in an ecological network analysis by Y. Lu et al.; the greenhouse gas inventory and ecological-economic benefits of the industrial park are discussed in two papers by B. Chen and his colleagues. Another two papers in this issue focus on renewable energy systems: Y. Wang et al. compare the ecological-economic value of two different biogas plants by an emergy method; Q. Yang et al. assess the nonrenewable energy cost and greenhouse gas emissions of a “pig-biogas-fish” agricultural system based on a life-cycle assessment. To analyze the incentive mechanism of power plant efficiency retrofit, D. Yuan et al. calculate the internal rate of return of an ordinary steam turbine coal-fueled power plant in China under different scenarios. The price elasticity of residential electricity demand is estimated by G. Shi et al. to fill the gap between data requirement for policy making and scientific research outcome. In a more technical research, Z. Wang et al. focus on light extraction efficiency improvement of light-emitting diodes. In summary, economics analysis on energy systems and policies of their development is gaining more and more attention, and the papers presented in this special issue represent the current status of their research. Nevertheless, many problems remain unresolved, and more research is necessary. We look forward to new progress on the basis of and beyond the investigations reported in this issue. Zhan-Ming Chen Bin Chen Han-Song Tang

Impact of pulling down regulatory state barriers on uranium in Australia: Is there a need in order to maintain and increase Australia’s global market share of uranium?

This paper sets a prospective framework to study the impact of opening more mines to meet future growing demand on Australia’s economy. The structure is aimed at decomposing investments and exports variables into Uranium exports and Uranium Exploration expenditure and analyse their impacts on each State GSP (Goods State Product) and for Australia as a nation. The demand and supply factors affecting the uranium market are defragmented before providing the research methodology and data specifics. Later analysis is expected to have policy implications by serving as a guide to pull down State Regulatory barriers like those imposed currently in Queensland, which is rich with uranium deposits and allow only uranium exploration but no uranium mining. Empirical findings would suggest whether exporting the carbon free energy would add value to Australia’s different competing states and as a whole globalized economy.

Assessing Kazakhstan´s proposal to host a nuclear fuel bank

Los defensores del control de armamentos buscan mecanismos para desincentivar la extensión de tecnologías sensibles para la proliferación. La mayoría de planes consideran situar las tecnologías del ciclo de combustible nuclear bajo un mayor control multilateral. Las propuestas para establecer uno o más bancos de combustible nuclear encajan claramente en este enfoque. Bajo este sistema, los países pueden “tomar prestado” el combustible que necesiten para sus reactores nucleares de un repositorio bajo control de la AIEA. Kazajstán ha ofrecido considerar el establecimiento de un banco internacional de combustible nuclear en su territorio. El país cuenta con ciertas características que podrían convertirlo en un buen candidato para un banco de combustible. Por ejemplo, Kazajstán es un actor destacado en el mercado internacional de uranio, tiene buenas relaciones con muchos países, y su gobierno cuenta con un historial sólido de no proliferación. Sin embargo, existe preocupación entre los observadores nacionales e internacionales acerca del ambicioso programa del gobierno kazajo, sus relaciones con países propensos a la proliferación, y la oposición de la sociedad en Kazajstán a las actividades nucleares.

Effects of technological learning and uranium price on nuclear cost: Preliminary insights from a multiple factors learning curve and uranium market modeling

This paper studies the effects of returns to scale, technological learning, i.e. learning-by-doing and learning-by-searching, and uranium price on the prospects of nuclear cost decrease. We use an extended learning curve specification, named multiple factors learning curve (MFLC). In a first stage, we estimate a single MFLC. In a second stage, we estimate the MFLC under the framework of simultaneous system of equations which takes into account the uranium supply and demand. This permits not only to enhance the reliability of the estimation by incorporating the uranium price formation mechanisms in the MFLC via the price variable, but also to give preliminary insights about uranium supply and demand behaviors and the associated effects on the nuclear expansion. Results point out that the nuclear cost has important prospects for decrease via capacity expansion, i.e. learning-by-doing effects. In contrast, they show that the learning-by-searching as well as the scale effects have a limited effect on the cost decrease prospects. Conversely, results also show that uranium price exerts a positive and significant effect on nuclear cost, implying that when the uranium price increases, the nuclear power generation cost decreases. Since uranium is characterized by important physical availability, and since it represents only a minor part in the total nuclear cost, we consider that in a context of increasing demand for nuclear energy the latter result can be explained by the fact that the positive learning effects on the cost of nuclear act in a way to dissipate the negative ones that an increase in uranium price may exert. Further, results give evidence of important inertia in the supply and demand sides as well as evidence of slow correlation between the uranium market and oil market which may limit the inter-fuels substituability effects, that is, nuclear capacity expansion and associated learning-by-doing benefits.

Re-examining uranium supply and demand: New insights

In this paper, we derive a simultaneous system of equations which aims at analysing the uranium supply and demand. In addition to reviewing and updating previous studies dealing with the uranium market analysis, in particular Amavilah (1995), the contribution of the paper lies in putting attention to some questions which are still either controversial or unanswered. They are especially related to the controversial hypothesis of the interdependence between uranium market and other commodities markets, both, with respect to the demand side, i.e. oil and coal markets, and the supply side, i.e. gold market. The paper also casts lights on electricity and uranium price effects on uranium demand as well as on the simultaneous interdependencies that may exist between nuclear consumption and nuclear installed capacity. The model is estimated for three different time periods which takes into account the major events that have influenced the nuclear-uranium development, that is, that have constrained the growth rate of nuclear generating capacity, i.e. oil crisis and nuclear accidents. This permits to show if uranium market reaction is independent or it is correlated with specific events associated with each time periods. The model was estimated by using the 3SLS method that correct for the presence of contemporaneously error terms correlation and for the existence of simultaneity bias in the model. Main results give evidence of significant correlation between uranium price and competing fossil fuel prices. They also point-out that uranium price is significantly correlated with the supply forces where supply is significantly dependent on gold prices. Moreover, results show that the electricity prices have a significant effect on the uranium demand only in the post-1990 period, probably following the worldwide electricity prices increasing trend. Further, our estimations show that uranium demand is significantly correlated with uranium price only in the period of nuclear major expansion. As for the nuclear electric consumption and the nuclear installed capacity, results show that they are simultaneously correlated and that the uranium demand depends on both of them, but only for the pre-1990 period. Interestingly, our results give evidence of low elasticities and inelastic reaction of independent model variables to exogenous variables fluctuations, except for the uranium price equation. Based on these results, some policy implications related to, first, the competitiveness of the uranium market and, second, to the supply–demand policy and the associated pricing mechanisms on the uranium market are discussed.

A review of uranium economics

The recent increase in the demand for power for commercial use, the challenges facing fossil fuel use and the prospective of cheap nuclear power motivate different countries to plan for the use of nuclear power. This paper reviews many aspects of uranium economics, which includes the advantages and disadvantages of nuclear power, comparisons with other sources of power, nuclear power production and requirements, the uranium market, uranium pricing, spot price and long-term price indicators, and the cost of building a nuclear power facility.

Uranium markets

Uranium markets

REFASHIONING AUSTRALIA'S NUCLEAR BARGAIN?

This article explores the challenges that Australia faces in reconciling its commitments to nonproliferation and uranium exports during a time when the international nuclear nonproliferation regime is under major stress and the world uranium market is bullish. The “grand bargain” that has framed Australian participation in the nonproliferation regime and the nuclear fuel market since the 1970s was only tenable in an era of stagnant uranium demand and a stable nuclear balance. However, contemporary nuclear proliferation dynamics and the revival of interest in nuclear energy have accentuated the incompatibility between Australia's commitment to nonproliferation and the desire to profit from uranium exports. The contemporary international strategic environment, international nonproliferation regime, and nuclear energy market are characterized by developments that not only undermine the basis of Australia's grand bargain, but also present challenges and opportunities for the refashioning of Australian policy.

How and when 4thGeneration Nuclear Systems could Deploy?

Fast reactors exhibit two major advantages over classical thermal reactors: sustainability and waste minimization. The deployment of 4th generation nuclear reactors depends on economical, industrial and political issues. We feel that the waste radiotoxicity reduction argument, although very crucial and socially sensitive, could not by itself justify implementing a new reactor system including a dedicated reprocessing scheme. But the foreseen tension of the uranium market may urge on developing fast reactor systems. Putting aside politics, we tentatively try to answer a very simple question: At which uranium price will it be economically competitive to build a fast reactor instead of a light water one? The levelized cost of nuclear electricity is analyzed and split into its different components (investment, fuel supply, fuel cycle, etc…). Assuming some minimal and reasonable hypotheses, fast reactors costs are compared with light water ones. The uranium price necessary to compensate for the higher investment cost of fast reactors is then deduced. One major conclusion that can be drawn from our study may be summarized as follows: if the uranium market price maintains its present level for a long period of time, fast reactors are already today an economically attractive option.

Update on Uranium Availability; Current and Forecast Mine Production and the Resources Issue

During the past three years, uranium price followed a very fast rise, and this trend is continuing. What does it mean? Short term or long term tension, speculation, resources depletion signal?Because for many, “what is expensive is necessarily scarce”, updating our knowledge on the uranium market situation, likely future trend and prospects is essential.Fast economic growth in Asia, population increase, global warming issues are the main drivers of an already perceivable nuclear renaissance. The uranium resources availability is a key factor to define the future share of nuclear power, the reactor technology and the related fuel cycle.Three periods of time are identified and are requesting specific answers:- Near term; a period when nuclear power must show its ability to reliably address global power needs and global warming concerns- Long term; a period when nuclear power will ramp-up well beyond current capacity using mainly proven advanced LWR technology (Gen 3+)- Very long term; a period yet to be defined when nuclear power will ramp-up to very high capacity using a mix including a significant share of advanced Gen 4 reactors.After a detailed analysis of current supplies and today’s price signal interpretation, the content of this paper is aimed at addressing the following basic questions:- Near term uranium supply issues?- Uranium production ramp-up capability?- Long term Uranium Resources availability?To conclude, a discussion about future Nuclear Fuel security of supply according to various scenarios for the global nuclear power plant fleet will tentatively describe the uranium supply scene for the long run and show its adequacy.

China and Nuclear Power: Constrained by Uranium?

Energy is a vital input in China’s economy, and demand for energy is forecast to continue increasing. Energy needs in China are expected to increase due to energy requirements of China’s economy as well as a result of the secondary impacts of economic growth on per capita income and urbanization. China has made these ambitious declarations regarding its plans to build nuclear power plants not only as a result of its concerns about energy security, but also to support its goal of reducing the amount of energy that is produced from coal. Although China’s coal reserves are abundant, coal-based energy generation has resulted in severe health, safety and environmental problems. The use of nuclear energy generation is also attractive as part of a solution to supply and environmental problems since it allows economic growth to continue unimpeded, a condition considered vital to political stability, which means that the leadership would be loath to impede it even though the environmental impacts of development have been the source of social discord. Despite steps taken to realize its nuclear energy generation goals, China’s ability to generate electricity from nuclear sources as a substitute source of energy will be constrained by technical, logistical and market factors and may not be a panacea for national energy concerns. However, China’s strategy in pursuit of sufficient uranium supplies, which mirrors its mercantilist approach to global oil markets, may be more successful in the uranium sector due to the fundamentally different nature of the global uranium market.

Economic theory and nuclear energy

The economics literature dealing with nuclear energy and uranium is inadequate, and several extremely important topics deserve a more methodical treatment. This survey provides: an alternative derivation for the optimal mix of generating capacity; a systematic but essentially non-technical approach to the nuclear fuel cycle; some comments on alternative technologies; and a stock-flow analysis of the market for uranium. It is also argued: that existing nuclear facilities in countries like Sweden can compete with all fossil fuels in the generation of electricity; and that claims that unconventional or renewable energy sources are economic at the present time are misleading, and might serve to accelerate the introduction of a plutonium-based energy economy.

96/06063 The Red Book — past, present and future of the uranium market

96/06063 The Red Book — past, present and future of the uranium market

The Global Uranium Market Supply and Demand 1992–2010

The Global Uranium Market Supply and Demand 1992–2010

Will the uranium market heed the call for more from the mines?

Will the uranium market heed the call for more from the mines?

A model of the world uranium market

In this paper the structure of the world uranium market is analysed and an econometric model developed. The modelling effort is focused on the spot market because developments in the spot market are increasingly being reflected in contract arrangements and it is more transparent than the contract market. Changing surplus supplies of uranium on the spot market have led to wide variations in the spot price and this relationship is a focus of the analysis. The results indicate that stocks will reduce to a point where a gradual rise in spot prices can be expected after 1993 but the recovery will be sensitive to new supply entering from non-traditional market sources.

Weapons to fuel

The economic implications of the U.S.‐Russian HEU agreement remain uncertain, and will depend on the health of the uranium market and the performance of the U.S. gaseous diffusion enrichment plants. The agreement, however, could be essential for the dismantlement of nuclear weapons in Russia. It also provides an opportunity to develop security, economic and institutional arrangements that would be useful in dealing with fissile materials from weapons in the future.

Integrating uranium from weapons into the civil fuel cycle

Under a recently‐approved agreement, Russia will sell perhaps 500 tonnes of highly enriched uranium (HEU) recovered from its dismantled nuclear weapons to the US Department of Energy over the next twenty years. Blended with natural or depleted uranium to produce low‐enriched uranium for reactor fuel, this HEU could displace power consumption in the electricity‐intensive gaseous diffusion plants of the US. The sale of the HEU could be done in a way that minimizes uranium market disruptions and benefits both the US and Russia.