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Conversion - Is Renewal On The Way - Nuclear Engineering International
Conversion - Is Renewal On The Way - Nuclear Engineering International
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http://www.neimagazine.com/features/featureconversion-is-renewal-on-...
During the past year, the market for converting uranium ore concentrates (U3O8) to natural
uranium hexafluoride (UF6) was stable relative to the uranium and enrichment markets
despite some mixed signals. By Eileen Supko and Thomas Meade
Market
Over the past decade, there has been high volatility in the spot market
indicators for conversion services, marked by rapid increases and severe
declines in price. Separate market price indicators are reported for the North
American and European markets. While the North American market is
discussed in detail here, the European market price typically contains a modest
premium when compared to the North American price. The price differential in
the North American and European markets is attributed to the mismatch
between conversion capacity and enrichment capacity in the North American
and European markets. (Essentially European converters are able to charge
higher prices for delivery of UF6 to European enrichment plants, which also
need to utilize feed from North American converters that comes with additional
transportation costs.)
The North American conversion services spot market price, based on monthly
price indicators published by TradeTech LLC, experienced slow but steady
decline following the Fukushima accident, bottoming out at $6.75 per kgU
during the first half of 2012, down 44% from the February 2011 value. Following
the announced closure of Honeywell's Metropolis Works to make upgrades,
there was a steady increase in the spot market price indicator to $10.50 per
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kgU by October 2012, and it now stands at $9.25 per kgU (31 July 2013). While
the decrease in primary production that resulted from the year-long closure of
Metropolis Works helped absorb some secondary market supply, the recent
restart of production there may result in some near-term degradation of market
indicators.
The North American long-term market price has historically been much less
volatile than the spot market price indicator and, in fact, TradeTech's term price
indicator remained unchanged at $16.75 per kgU for nearly two years, before
declining at $16.00 per kgU on 31 July 2013. The term price indicator's
response to the primary drivers of the spot price during this time has been
muted. The term price indicator rose just 8% in the six months following the
Fukushima Daiichi accident and has not changed at all during the year-long
shutdown of primary production at Metropolis Works. While the disconnect
between the published spot and term market price indicators has decreased
from 60% a year ago to 40% today, the large gap between spot and term
indicators continues to persist.
It is not unreasonable to expect the price gap to close further, perhaps through
rising spot prices as well as somewhat lower term prices. The lower quantities
transacted on the spot market have allowed for sudden price changes
historically, and this will remain the case in the future.
Requirements
Natural (that is, unenriched) UF6 serves as feed material for the uranium
enrichment process to produce enriched uranium product (EUP) - also referred
to as low enriched uranium (LEU) - used to fuel light water reactors (LWRs)
that power the majority of commercial nuclear power plants throughout the
world.
World requirements under the ERI reference nuclear power growth forecast for
UF6 conversion services are projected to increase by 52% between 2012 and
2035, from 57 million kgU in 2012 to 87 million kgU as UF6 by 2035. World
requirements for uranium conversion in other forms, primarily for use in
pressurized heavy water reactors (PHWRs), add another 2.3 to 3.6 million kgU
but do not require conversion to UF6.
US annual requirements are projected to remain in a narrow range between 16
and 20 million kgU through 2035 for the reference forecast. Western European
requirements, which were approximately 17 million kgU in 2012, are projected
to decline by as much as 25% during the period 2031-2035. However,
requirements for UF6 conversion services in the Commonwealth of
Independent States and Eastern Europe, East Asia and other regions are
expected to grow by 34 million kgU to 56 million kgU, or 155% between 2012
and 2035.
World requirements for UF6 conversion services under the ERI high nuclear
power growth forecast climb to 126 million kgU per year by 2035 -- an increase
of 120% over 2012 requirements. Under the ERI low forecast, world UF6
conversion services requirements demonstrate modest growth to 60.4 million
kgU by 2020, but then decline to 53 million kgU by 2035, which is 8% below
2012 requirements.
Primary producers
There are four primary commercial suppliers of uranium conversion services
worldwide: Converdyn (USA), Cameco (Canada, with a supporting facility in the
UK), AREVA/Comurhex (France), and Rosatom/TVEL (Russia). CNNC (China)
is also discussed due to the substantial role that it is expected to play in the
future. Table 1, p22, gives a breakdown of each supplier's market share in
2012. The other category includes supply by small producers such as Brazil,
Argentina and India, and secondary supply.
AREVA subsidiary Comurhex operates facilities at two sites that are involved in
the conversion of uranium to UF6. The Comurhex Malvesi plant converts
uranium into UF4 and uranium metal. The Comurhex Tricastin site in
Pierrelatte, France produces UF6 from the UF4 produced at Malvesi. In addition
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Market outlook
Primary production met approximately 67% of 2012 requirements, and
secondary supply, which includes the feed component of Russian HEU,
enrichment tails upgrading, and government stockpile draw-down was more
than adequate to meet the remainder of requirements. In fact total supply, both
primary and secondary, exceeded 2012 requirements by 7%. This represents a
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Figure 1: Projected
secondary supply of
equivalent conversion
services
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Figure 2: Projected
conversion services
supply and
requirements
Metropolis Works
Comurhex II Malvsi
construction site,
France
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