Cameco and Kazatomprom have increased their sales and revenue guidance for 2023 upwards as market fundamentals continue to improve.
The Kazakh uranium producer increased its 2023 sales guidance in its half-year trading update on 1 August, with group sales volumes increasing from 15,400-15,900 tU to 17,500-18,000 tU. This is due to customers asking to “flex up” their annual delivery quantities within existing contracts, some new long-term contracts with delivery in 2023, and Yellow Cake plc’s execution of its annual option to purchase uranium.
The company’s production guidance is unchanged at 20,500-21,500 tU (on a 100% basis).
Cameco published its second-quarter results on 2 August, with an update to its consolidated revenue outlook for 2023 which is now CAD2.4 billion-2.5 billion (USD1.8 billion-1.9 billion), up from its previous outlook of CAD2.2 billion-2.4 billion.
“The significant momentum seen in the nuclear energy industry and the heightened supply risk caused by geopolitical developments are translating into increased opportunities for Cameco,” the company’s President and CEO Tim Gitzel said in its 2 August announcement. “As a result, for 2023, we have increased our consolidated revenue outlook, which is primarily driven by higher expected average realised prices under our contract portfolio and increased deliveries in our uranium segment.”
“All over the world, government policies and corporate decisions are being followed up with proposals, commitments, and actions to support the nuclear fuel cycle and re-energise nuclear power as a fundamental source of clean, secure and low-cost energy. We are seeing improving market fundamentals with prices for uranium rising, and UF6 conversion prices hitting new record-highs.
“With over 118 million pounds of long-term contracting industry wide so far this year, we are happy to say that we believe there is clear evidence that the broader uranium market is moving toward replacement-rate contracting. Based on the rate of contracting seen year-to-date, we expect industry long-term contracting volumes in 2023 to exceed those in each of the last 10 years. We believe this is a good indication that a new long-term contracting cycle is underway.”
Shipment delays
The first shipment of Cameco’s share of 2023 production from its Inkai joint venture has been delayed but is expected to begin during the third quarter, the company noted. “The geopolitical situation continues to cause transportation risks in the region. We continue to work closely with JV Inkai and our joint venture partner, Kazatomprom, to receive our share of production via the Trans-Caspian International Transport Route, which does not rely on Russian rail lines or ports. We could experience further delays to our expected Inkai deliveries this year if transportation using this shipping route takes longer than anticipated,” the company said.
The company can draw on its inventory, long-term purchase agreements and loan arrangements to mitigate the risk of delays, it said.
Source: World Nuclear News
