Western Uranium Corp (WUC) has highlighted the positive uranium news released out of Kazakhstan this morning. Subsequent to the 2008 Global Financial Crisis and 2011 Fukushima nuclear accident, global uranium demand has stagnated causing oversupply which has depressed market prices. Uranium production cuts have been anticipated and in this fourth quarter these have been put in place by a number of major uranium producers for 2018.

Today Kazatomprom, the world’s largest uranium producer announced its intention to reduce planned production by 20%. According to the Kazatomprom announcement, this action will remove over 8 Mlb from the market in 2018 and approximately 24 Mlb of uranium over a three year period. In making this announcement, Kazatomprom cited the goal of better aligning its production levels with market demand. This follows the Honeywell announcement on November 20 that its ConverDyn conversion facility would be immediately idled. The diminished production of uranium hexafluoride (UF6) from this last operating conversion facility in the US removes approximately 15 Mlb of uranium from the market. Honeywell put forth similar rationale noting that the current oversupply has caused a downward trend in uranium markets.

Furthermore, on November 8 in a Cameco announcement production was suspended at McArthur River mine and the Key Lake mill (shown). It was stated that this would start January 2018 and remove some 1.2 Mlb per month of uranium production from the global uranium supply. Cameco, North America’s largest uranium producer, took these actions in response to uranium price weakness.

“In total,” says WUC, “as a result of these major announcements, approximately 37 Mlb in aggregate can be calculated to be removed from 2018 uranium supply. Consequently, the aggregate effect of these production cuts, if implemented as announced, will eliminate a large portion of oversupply.”