Transcript Document

TENEX
on the World(TENEX)
Nuclear
Fuel Market:
JSC TECHSNABEXPORT
The LeadingLooking
Russian Supplier
of Nuclear
into the
FutureFuel
Cycle Products and Services
Andrey Tovstenko
Head of Marketing and Business
Strategy Directorate
JSC TECHSNABEXPORT
ATOMEXPO-2013
Moscow
Saint Petersburg, Russia, June 2013
April, 2011
1
TENEX Market Chronology
2012
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
Europe
France
TENEX
establishment
1995
1993
1987
19731976
(other countries)
(The first SWU Contract)
1999
1990
USA & Europe
USA
2009
1971
1963
2
TENEX’s Market Presence Evolution
Western SWU market structure
Geographical Structure of TENEX’s Export
100%
5%
16%
90%
80%
70%
69%
60%
50%
57%
67%
91%
36%
100%
40%
30%
48%
20%
31%
33%
2000
2012
38%
10%
0%
9%
1975
TENEX
Others
1975
Europe
2000
America
2012
Asia-Pacific and Africa
TENEX has gained a significant share of the global market for the NFC goods and services.
Its geographical market presence gradually becomes more diversified
3
Key Market Trends: Nuclear Power Development
840
GWte
Non-Russian Design Nuclear
Capacities
Gwte
300
World Nuclear Generation Capacities
WNA-2011 (upper)
790
250
2013
200
740
IAEA-2012 (max)
UxC-2013 (high)
690
2030
150
274
100
120 137
50
114 112
640
82
0
America
590

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.
490
UxC-2013 (low)
World
372.7
IAEA-2012 (min)
390
340
290
Asia&Africa
Source: Uranium Requirements Model published in UxC
URM Report Q1 2013.
540
440
Europe
WNA-2011 (low)
Non-Russian
Design Reactors
316
240
2013, June
2015
2020
2025
2030
4
Key Market Trends: Enrichment & Natural Uranium
• Nuclear newcomers from emerging markets drive demand
 increased demand for integrated products
SWU Prices, $/SWU
170
160
150
• 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
130
120
Ux SWU
Price
Ux LT
SWU Price
110
100
Jan 2010
Mar 2010
May 2010
July 2010
Sep 2010
Nov 2010
Jan 2011
Mar 2011
May 2011
July 2011
Sep 2011
Nov 2011
Jan 2012
Mar 2012
May 2012
July 2012
Sep 2012
Nov 2012
Jan 2013
Mar 2013
May 2013
• 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
140
Natural uranium prices, $/lb
80
75
70
65
60
55
50
45
40
35
30
Ux NatU LT
Ux NatU Spot
Jan 2010
Mar 2010
May 2010
July 2010
Sep 2010
Nov 2010
Jan 2011
Mar 2011
May 2011
July 2011
Sep 2011
Nov 2011
Jan 2012
Mar 2012
May 2012
July 2012
Sep 2012
Nov 2012
Jan 2013
Mar 2013
May 2013
• Transition period from gas diffusion to gas centrifuge
completed
 in the long-term suppliers will compete in new market
environment
5
0
07 Июль
July 2007
Апрель
April072007
06 Октябрь
2006
October
2007
January
07 Январь
Апрель
April062006
06 Июль
July 2006
05 Июль
July 2005
2005
October
05 Октябрь
2006
January
06 Январь
Апрель
April052005
October
2004
04 Октябрь
2005
January
05 Январь
July 2004
04 Июль
2004
January2004
January
April042004
Апрель
Low Price Periods
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)
6
April132013
Апрель
12 Октябрь
October
2012
13 Январь
2013
January
Апрель
April122012
12 Июль
July 2012
2012
January
12 Январь
11 Июль
July 2011
2011
October
11 Октябрь
Апрель
April112011
10 Октябрь
October
2010
2011
January
11 Январь
July 2010
10 Июль
140
Апрель
April102010
09 Октябрь
October
2009
2010
January
10 Январь
09 Июль
July 2009
Апрель
April092009
09 Январь
2009
January
08 Октябрь
October
2008
Апрель
April082008
08 Июль
July 2008
07 Октябрь
October
2007
2008
January
08 Январь
$/lb
Key Market Trends: Possible Instability
Natural Uranium Spot Price Since 2004
160
120
Price Spikes
100
80
60
40
20
 Periods of low-price lead to discourage of producers and make them to decrease production. This
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
20
Other
expansions
+ 5.6
10
ETC
+ 16
ACP, SILEX
+4
Total
in:
+25.6
Net:
+5.2
Net:
+18.9
GB I
-8
-10
Paducah
-6
-20
HEU
-6.4
Total
out:
-20.4
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)
-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
7
TENEX Business Development
Direct relationship with utilities
Priority to long-term contracts
Promotion of products with the maximum added value
Strategic partnerships with nuclear fuel cycle products and services suppliers
Main
Directions
Flexible approaches based on priorities of the clients
Overseas sales network
Advantages of Russian geographical location
Transport and logistics infrastructure
Overseas stockpiles of uranium
Specific attention to regional market features
8
Market Instruments: Recent Developments (1)
Legal framework on the importation of uranium
from Australia, Canada and the U.S. to Russia,
“1-2-3 Agreement” between Russia and Japan
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
9
Market Instruments: Recent Developments (2)
Saint-Petersburg Port,
Russian Federation
Enrichment
plant
Conversionenrichment plant
Far East Port,
Russian
Federation
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
10
Market Instruments: Recent Developments (3)
Transport and logistics infrastructure development:
Far East Nuclear Materials Transportation Route
Start of activities in Far East in 2010
Implementation of the Enriched Uranium Product Trial Delivery
through Russian Far East Port
Russian port of Delivery: Vostochny port
Delivery time: reduced about 3 times
Vostochny Port
Experience in obtaining of all necessary licenses and
authorizations in Russia
(including licenses for stevedoring company in Vostochny port
and for sea carrier)
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
11
Market Instruments: Recent Developments (4)
Development of
the Natural
Uranium Delivery
System
November 2012 - The first shipment of Australian natural uranium to the Russian
Federation under a 2007 bilateral nuclear cooperation agreement
Benefits:
Enriched uranium and enrichment services contracts with increased contract terms flexibility in
regards of using customer owned natural uranium of different origins
Delivery Management Agreements with all US and European Fuel Fabricators
Material Account
System
Further Flexibilities Development in Process
More flexibility in delivery terms
Benefits:
Improvement of the service quality in the field of nuclear materials transportation and product
delivery
12
TENEX’s Overseas Sales Network
TENAM
(Bethesda, USA)
INTERNEXCO
(Frankfurt, Germany)
TENEX-Korea
(Seoul, Republic of Korea)
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
13
14