The Conversion Market Outlook

Although the conversion market is often overlooked, it still represents an important cost component of nuclear fuel, and all costs will receive more scrutiny in a more competitive electric industry. UxC's annual Conversion Market Outlook report is invaluable for identifying those forces influencing the market and analyzing supply, demand and price trends. From 2003 to 2005, spot conversion prices increased 150% in the wake of the Metropolis plant shutdown, a strike at Port Hope, Tenex’s termination of the HEU feed contract with GNSS, and the announced shutdown of the Springfields plant. Since then, the North American plants came back online, Tenex supplied replacement contracts, and Cameco and BNFL entered into an agreement to extend Springfields output for ten years (through 2016). Demand for conversion is also falling as utilities opt for lower tails assays in an environment where feed prices increased dramatically over the past several years. Does this mean we're out of the woods? Not exactly. The market is expected to be vulnerable over the next several years as inventories have been worked down to low levels following the disruptions. More recently, however, additional problems continue to appear in the conversion market such as the extended outage at Port hope. Transportation packaging requirements and costs have increased, and new investment must be made in conversion capacity. (Here the situation is somewhat similar to enrichment, where both additional and replacement capacity are needed.) Thus, the market is clearly in a transition phase, with important implications for buyers and sellers alike. With transportation difficulties, capacity questions, regional price disparities, and recent disruptions to secondary supplies, conversion services can no longer be viewed as a minor concern. Fuel managers need to understand the worldwide supply and demand picture for the next decade in order to make the right choices now. UxC's bi-annual Conversion Market Outlook report incorporates all of these events and provides a thorough supply-demand analysis and price forecast for conversion services. Please contact Eric Webb (see below) for details. Please see our product flier in Adobe Acrobat PDF format.

Standard features of the Conversion Market Outlook report include:

The report starts with a color executive summary, with an extra copy to circulate, providing a concise overview of the current market situation. An advance copy of the executive summary is now e-mailed to subscribers. Chapter 1 contains a topical essay that addresses key events and their potential impact on the market. Please note that the end-year update report does not contain an essay. Chapter 2 - Recent Contracting Review reviews recent contracting activity in both the spot and long-term conversion markets and describes some of the key developments and trends which are apparent from recent transaction activity. Chapter 3 - Requirements and Demand Outlook updates the world reactor demand and changes to conversion requirements on a regional basis. The spot and long-term demand picture for the near term is also analyzed. Chapter 4 - Primary and Secondary Supply Outlook examines spot and long-term supply sources, including an overview of each of the primary conversion suppliers and the most significant secondary or inventory supplies of conversion and UF6. Chapter 5 - Conversion Spot Market Indicators & Technical Analysis presents a detailed update of leading price indicators designed by UxC to quantify market factors that are affecting price outlook in the near-term, along with a technical analysis of near-term price movements. Included with a subscription to the annual report are monthly updates of UxC's near-term price indicators, a predictive tool used to gauge potential spot movements two to three months forward. Chapter 6 - Market Outlook and Price Forecast discusses near-term market fundamentals, provides bullish and bearish arguments as to where market prices could move over this period, and looks are future regional market developments. This section also presents three long-term scenarios of spot price forecasts, with separate forecasts for both North American and European delivery. The report also contains Appendix A - Statistical Review, which has expanded tables and figures in addition to those presented throughout the report. It is designed to be used as a standard reference source providing both historical and current market data.

You should definitely read this report if... You are a supplier of conversion services, You are considering entering the conversion market, or You are developing a strategy to cover needs over the next few years.

For additional information please contact Eric Webb at Phone: (770) 642-7745 Fax: (770) 643-2954