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The Minister added that this drop should put Kazakhstan on course for a 10% reduction in output for 2017 as a whole. Which would mean a reduction of about 2,500 tonnes of uranium (5.5 million pounds), given that 2016 production came in at 24,600 tonnes.
Local analysis of the Minister’s comments took this as a suggestion that production could be reduced further. Meaning we could see Kazakhstan take an OPEC-like approach in trying to reduce output to get uranium prices moving upward again.
At the same time, other news this week suggests more of Kazakhstan’s supply could be headed to a new destination: China. With Minister Bozumbayev also confirming that local producers have signed new supply deals with reactors in that country.
The Minister said that Kazakhstan will begin sending uranium to five Chinese nuclear reactors as soon as 2019. Marking one of the first major supply deals between the two nations.
That means there’s going to be more Kazakh supply tied up in long-term offtake deals — at the same time as overall output is falling. Watch to see if all of these factors will help to prop up uranium prices, which are currently languishing at spot rates near $20/lb.