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TENEX on the World Nuclear Fuel Market: Looking into the Future

TENEX on the World Nuclear Fuel Market: Looking into the Future. Andrey Tovstenko Head of Marketing and Business Strategy Directorate JSC TECHSNABEXPORT. ATOMEXPO-2013 Saint Petersburg, Russia, June 2013 . TENEX Market Chronology. UAE. USA

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TENEX on the World Nuclear Fuel Market: Looking into the Future

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  1. TENEX on the World Nuclear Fuel Market: Looking into the Future AndreyTovstenko Head of Marketing and Business Strategy Directorate JSC TECHSNABEXPORT ATOMEXPO-2013 Saint Petersburg, Russia, June 2013

  2. TENEX Market Chronology UAE USA (Resumption of Commercial Activity in accordance with the Amendment to the Suspension Agreement) Japan South Africa Republic of Korea The Beginning of Natural Uranium Deliveries to the USA & Europe USA Europe (other countries) France (The first SWU Contract) TENEX establishment

  3. TENEX’s Market Presence Evolution Western SWU market structure Geographical Structure of TENEX’s Export TENEX has gained a significant share of the global market for the NFC goods and services. Its geographical market presence gradually becomes more diversified

  4. Key Market Trends: Nuclear Power Development Source: Uranium Requirements Model published in UxC URM Report Q1 2013. • Referenced sources forecast long-term growth of nuclear energy in all scenarios (excl. WNA low), • Asian countries, inclusive China, India and Middle East will be the main drivers for nuclear energy. • Growth rate will mostly depend on such factors as energy consumption, competition from other energy sources (gas, oil, etc.) and ecological aspects. • The general increase of NPPs fleet will result from the fact that this industry provides clean and reliable source of energy.

  5. Key Market Trends: Enrichment& Natural Uranium • Nuclear newcomers from emerging markets drive demand •  increased demand for integrated products • Transition period from gas diffusion to gas centrifuge completed •  in the long-term suppliers will compete in new market environment • Number of suppliers increases • [Ex.: enrichment services sellers to US utilities: 5 in 2005, 7 in 2009, 11 in 2012 (source: EIA)] •  competition increases •  approved and reliable suppliers preferred • Downward pressure on natural uranium and SWU prices during recent period •  possible market instability in the mid-term • Kazakhstan is making the great contribution in the world uranium mining while many miners in other countries have cancelled or delayed expansion of uranium production SWU Prices, $/SWU Natural uranium prices, $/lb

  6. Key Market Trends: Possible Instability Price Spikes Low Price Periods January 2004 April 2004 July 2004 October 2004 January 2005 April 2005 July 2005 October 2005 January 2006 April 2006 July 2006 October 2006 January 2007 April 2007 July 2007 October 2007 January 2008 April 2008 July 2008 October 2008 January 2009 April 2009 July 2009 October 2009 January 2010 April 2010 July 2010 October 2010 January 2011 April 2011 July 2011 October 2011 January 2012 April 2012 July 2012 October 2012 January 2013 April 2013 • Periods of low-price lead to discourage of producers and make them to decrease production. This in its turn result in lack of material on the market, price spikes and unstable market situation • Fair price level provides sustainable market development and therefore it is favorable both for suppliers and customers (this is also true in case of SWU market)

  7. Market Trends: SWU Market Supply/Demand Balance(World market without the segment of Russian Design Reactors) Change in Non-Russian reactors SWU demand, primary (effective capacities) and quasi-primary (HEU-LEU) supply (excluding Russian commercial EUP/SWU export) by 2020, 2010 = base year mln. SWU Supply Demand 30 ACP, SILEX + 4 20 Other expansions + 5.6 Total in: +25.6 Net: +18.9 ETC + 16 10 Net: +5.2 GB I - 8 -10 Total out: -20.4 Paducah -6 • Sources: • - Demand: Uranium Requirements Model published in UxC URM Report Q1 2013, recalculated at current optimal tails assay (0.223%) • Supply: UxC Enrichment Market Outlook Q1 2013 (expected enrichment supplies) and TENEX estimates (old GDP projects) -20 HEU -6.4 -30 • By the end of the current decade considerable amount of primary (Western) and quasi-primary (HEU-LEU) supply exits the market (over 20M SWU), ~25M SWU new capacity is expected to come on stream • Net supply increase is forecasted at 5.2 M SWU, as net demand increase will amount 18.9 M SWU • For the sustainable SWU market development it is critical to fill the gap by mainly primary sources of supply • Russian Enrichment Industry is capable to contribute to this task both in medium- and long-term perspective

  8. TENEX Business Development

  9. Legal framework on the importation of uranium from Australia, Canada and the U.S. to Russia, • “1-2-3 Agreement” between Russia and Japan Market Instruments: Recent Developments (1) • First shipment of natural uranium from Australia in November 2012 • First shipment of Russian EUP through Russian Far East Port in October 2012 • Material Account System Development • Opening of TENAM Corporation office in Washington DC

  10. Market Instruments: Recent Developments (2) Enrichment plant Saint-Petersburg Port, Russian Federation Far East Port, Russian Federation Conversion-enrichment plant Tokyo Port, Japan EUP trial delivery to Japan through Russian Far East Port Natural Uranium Trial Delivery to the Russian Federation from Australia Adelaide Port, Australia Material stock accounts system Enhancement

  11. Transport and logistics infrastructure development: • Far East Nuclear Materials Transportation Route Market Instruments: Recent Developments (3) • Implementation ofthe Enriched Uranium Product Trial Delivery through Russian Far East Port • Start of activities in Far East in 2010 • Russian port of Delivery:Vostochny port • Delivery time: reduced about 3 times • Experience in obtaining of all necessary licenses and authorizations in Russia • (including licenses for stevedoring company in Vostochny port and for sea carrier) Vostochny Port • IZOTOP Company assistance for trial delivery via Vostochny port • Partnering with the largest Far East Container Terminal – LLC “Eastern Stevedoring Company” • Benefits: • - Shipping points diversification • - Reliability of supply improving • - Delivery time shortening • - European NFC products and services transit to Asia is possible EUP Trial Delivery demonstrated the efficiency of new Russian Far East Nuclear Materials Transportation Route

  12. Market Instruments: Recent Developments (4)

  13. TENEX’s Overseas Sales Network TENAM (Bethesda, USA) TENEX-Korea (Seoul, Republic of Korea) INTERNEXCO (Frankfurt, Germany) TRADEWILL (London, United Kingdom) TENEX-Japan (Tokyo, Japan) • 2012 • TENEX-Japan – the first direct contract execution with the delivery at Japanese fabricator • TENAM Corp.– Signing of EUP supply contract with a US utility under the Russian Suspension Agreement, as amended

  14. THANK YOU FOR YOUR ATTENTION !

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