BofA expects Russia-Ukraine crisis to weigh on uranium prices

Natsional'naya Atomnaya Kompaniya Kazatomprom AO

12/04/2022 17:00

** Bank of America expects the Russia-Ukraine war pressure
on uranium prices to persist and accelerate if Russian
production is lost as a result of a possible Western imports ban
    ** Uranium spot price is up 47% since Russia invaded Ukraine
on February 24, sitting now at $63.60/lb, says the broker,
expecting this pressure to remain
    ** Russia is important to global uranium supply chains,
accounting for 17% of 2022 total supply and for 29% of 2022
production
    ** BofA believes that Western capacity will take time to
ramp up and may become congested without Russian production,
accelerating inventory draw-downs
    ** "While there is ample enrichment capacity in the west,
conversion may act as a near-term bottleneck on feedstock," it
says
    ** The broker increases its uranium price 2022-2027
forecasts by 20% on average, and its 2027 long-term price
forecast by 4% to $50/lb
    ** It raises its target price for Cameco  CCO.TO  ("buy") to
$37 from $32, and raises its 2024-2023 EPS estimates to $1.23
and $1.28, saying its assets are mostly located in Canada,
making it a preferred supplier to western utilities
    ** It also names Kazakh Kazatomprom  KZAP.KZ  and French
Orano (EDF  EDF.PA  subsidiary) as predominant beneficiaries of
the Ukraine war

 (Reporting by Dina Kartit)
 ((dina.kartit@thomsonreuters.com))