WINNIPEG, Manitoba, Feb 8 (Reuters) - Cameco Corp warned on Monday a long-awaited recovery for the slumping uranium industry was not imminent, as the second-largest global producer of the metal and other miners wait for utilities to work through surplus stocks.
Spot prices of uranium, used to make fuel for nuclear power production, have been depressed since the 2011 Fukushima disaster in Japan, which led to the shutdown of all reactors in that country, generating burdensome stockpiles globally.
Miners, including Cameco, have been forced to contend with lackluster bottom lines. The Canadian company reported a quarterly loss after markets closed on Friday.
Its stock plunged more than 5 percent in Toronto and New York around midday.
“We’re still waiting on a recovery that has been expected to come sooner,” said Cameco Chief Executive Tim Gitzel, on a conference call Monday. “Long-term, we know good things are in store.”
Contracting activity between producers and utilities has been slow, and a meaningful uptick is unlikely before late this year, Cameco officials said.
It may take even longer.
Contracting looks to significantly pick up in 2018 as agreements expire, said Nick Carter, executive vice-president of uranium at Ux Consulting, based in Roswell, Georgia.
Utilities typically sign long-term supply contracts between two to three years ahead of delivery, he said.
Uranium spot prices remain stuck around $34.65 per pound, some 40 percent lower than in March 2011, when an earthquake and tsunami hit Japan, triggering a meltdown.
But recovery is just a matter of time, based on supply and demand outlooks, Gitzel said.
China is building 24 reactors to produce power from nuclear fuel, according to Cameco.
The company estimates that 439 nuclear reactors operated globally in 2015, down two from 2010. It forecasts that total to rise to 450 reactors this year and to 497 by 2025.
As demand grows, there are few new sources of supply to keep pace, as weak prices dampen producers’ enthusiasm for building mines.
World uranium consumption has for several years slightly outstripped mined production, according to Cameco estimates, but stockpiles have more than made up the difference.
Uranium miners are also eager to capitalize on 2015’s United Nations climate agreement, as nuclear power plants that emit less greenhouse gas than other sources of power production could help achieve goals to slow climate change. (Editing by Marguerita Choy)