Uranium loans: Delaying the day of reckoning

Journal Article · Wed Sep 01 00:00:00 EDT 1993 · NUKEM Market Report; (United States)

OSTI ID:7028252

Spot market volume so far this year, by NUKEM's estimates, comes to just under 11 million lbs. It appears that existing loans are either being extended, or paid back with material borrowed from other sources. Therefore, there has been no significant amount of purchases on the spot market to pay back borrowed uranium. How do we know the loans have not been paid back with spot purchases For one thing, the amount of uranium loans outstanding has increased. According to our current survey, there may now be as much as 32 million lbs U3O8 equivalent in outstanding loans. At current prices, it's cheaper to borrow than to buy uranium. So borrowers are gambling that prices will remain low for some time, allowing them to delay repayment of the loans. Borrowers then, in essence, are delaying the day of reckoning on these loans. How long they can do so is anyone's guess. As long as uranium is in abundance and utilities remain willing to lend it out, loan activity will likely remain at or near current levels. But when supplies tighten and the market swings in a more positive direction, borrowers may get caught scrambling to repay their loans as quickly as possible.

• OSTI ID: 7028252
• Journal Information: NUKEM Market Report; (United States), Journal Name: NUKEM Market Report; (United States)
• Country of Publication: United States
• Language: English

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11 NUCLEAR FUEL CYCLE AND FUEL MATERIALS
URANIUM OXIDES U3O8
PRICES
DATA COMPILATION
ECONOMICS
ELECTRIC UTILITIES
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SPOT MARKET
SUPPLY AND DEMAND
ACTINIDE COMPOUNDS
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