The announcement made by uranium giant Cameco a month ago that it’s suspending operations at its flagship McArthur River mine in northern Saskatchewan, Canada did little to move to languishing uranium price.
Last week the nuclear fuel was pegged at $23 a pound, a level it has hovered around for long stretches of 2017. On Monday, the world largest producer of uranium, surprised the beleaguered market with a larger than expected cut to production of its own.
Kazakhstan’s state-owned Kazatomprom announced intentions to reduce its output of U3O8 by 20% or 11,000 tonnes (around 28.5m pounds) over the next three years beginning in January 2018.
According to the company roughly 4,000 tonnes will be cut in 2018 alone “representing approximately 7.5% of global uranium production for 2018 as forecast by UxC.”
Rob Chang Managing Director and Head of Metals & Mining – Canada at Cantor Fitzgerald in a research note on Monday said Kazatomprom is assuming a greater leadership role in the market and the bigger than expected cut is “the type of supply shock that will spur strength in the spot U3O8 price as a significant amount of expected production for 2018-20 is removed.”
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