Nuclear Giants Stockpile Fuel

Source:

Companies are stockpiling the nuclear fuel used to power reactors. . .

Some of the world's biggest energy companies are stockpiling the nuclear fuel used to power reactors, as they try to capitalize on rock-bottom uranium prices.

An oversupply of nuclear fuel on international commodity markets has followed five successive years of rapid growth in uranium ore production in Kazakhstan, which has nearly quadrupled its output since 2004.

Raw uranium prices have tumbled to around $40 per pound—almost one quarter of the levels of $140 in 2007.

Ed Sterck, uranium analyst at Bank of Montreal, said that the low price was encouraging nuclear power station operators to boost their stocks of nuclear fuel.

Energy companies in China, which is pursuing an aggressive nuclear expansion program, have also been active buyers.

The best way to establish the amount of nuclear fuel being held by energy companies is to examine the level of buying activity in the spot uranium market, Mr Combs said. UxC data showed that during the first three months of 2010, about 13 million pounds of uranium was bought and sold in the spot market, compared to 20 million pounds during the whole of 2007.

"There is a lot of evidence that utilities have been building up their inventories of uranium. It's cheaper for them to buy it on the spot market than to strike long-term contracts." Mr Combs said that detailed information about stockpiles held by individual companies was hard to obtain as it is considered commercially sensitive.

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