Japanese utilities start selling uranium fuel into depressed market

Company accounts for the financial year ended in March showed that nuclear fuel valuations ranged from nearly two times market capitalization in the case of Hokkaido Electric Power to 16 percent for Chubu Electric Power. (Reuters)
Updated 23 August 2019

Japanese utilities start selling uranium fuel into depressed market

  • Sales by Japanese utilities “are definitely showing up more in the market”

TOKYO: Japan’s nuclear operators are starting to sell some of their huge holdings of uranium fuel, as chances fade of restarting many more reactors eight years after the Fukushima nuclear disaster.
The sales so far have been small, but were made at values well below their purchase price and are likely to further depress the already beaten-down uranium market, say two senior market specialists.
They could also focus attention on the balance sheets of the country’s utilities, bolstered by holdings of nuclear fuel valued at 2.5 trillion yen ($24 billion), a figure that market experts say is highly unrealistic.
“Given the extended shutdown of our reactors, we are selling uranium as well as canceling long-term contracts where necessary,” Japan Atomic told Reuters in a statement.
The company, which is yet to receive all the regulatory approvals needed to restart reactors at either of its two nuclear stations, declined to provide further details.
Before the meltdowns at Tokyo Electric Power’s Fukushima plant in March 2011 after an earthquake and tsunami, Japan was the world’s third-biggest user of nuclear power behind the United States and France, operating 54 nuclear reactors.
It is permanently shutting 40% of its facilities and just nine of the 33 remaining have restarted. With reactors also being closed in the United States, Germany, Belgium and other countries, traders and specialists say the market is likely to remain depressed for years.
Unlike other commodities such as crude oil, most of the nuclear fuel market is privately traded, generally on long-term contracts, although CME Group’s NYMEX has a futures contract for uranium oxide (U308).
The contract is settled on prices supplied by US-based UxC LLC and is currently trading at about a third of where it was before Fukushima. US based UxC, LLC also calculates prices for converted and enriched uranium.
Sales by Japanese utilities “are definitely showing up more in the market,” said one US-based market specialist, who requested anonymity because of the sensitive nature of the industry.
“Some are selling uranium, some are selling more upstream products or services,” such as enriched uranium, he said. “Japanese inventory is a big overhang in the market.”
A senior fuel trader told Reuters his company had purchased nuclear fuel from a Japanese utility but declined to give details.
Japan Atomic was responding to a Reuters survey of 10 Japanese utilities that have operated nuclear plants. All the other utilities declined to comment on whether they had sold any nuclear fuel.
One said it adjusts supplies for optimal inventory levels and three said they have delayed deliveries of fuel.
Tepco in 2017 canceled a supply contract with Canadian uranium fuel producer Cameco, which was awarded $40.3 million in damages last month by an arbitration panel.
“Tepco has made efforts to reduce its holdings of nuclear fuel, such as by partly reducing uranium purchase contracts,” the company told Reuters, without giving further details.
Unlike in Europe and the United States, Japanese utilities are not required to mark to market their fuel holdings. They are booked on Japanese operators’ balance sheets as fixed assets at the purchase price, the utilities told Reuters.
“If the utilities are not going to use the fuel, and it is unlikely they will get many more reactors going, then at some point they will have to take losses on their holdings,” said Tom O’Sullivan, the founder of energy consultancy Mathyos Japan.
Company accounts for the financial year ended in March showed that nuclear fuel valuations ranged from nearly two times market capitalization in the case of Hokkaido Electric Power to 16 percent for Chubu Electric Power.
Sector-wide the nuclear fuel valuation is nearly 50 percent of the market value of the nine publicly traded utilities, calculations by Reuters showed.
Japanese utilities also count spent fuel that is being reprocessed into highly toxic plutonium for future use in reactors as an asset on their balance sheets.
The country has the world’s biggest inventory of plutonium held by a state without nuclear weapons, but experts say it may be more of a liability than an asset.
“That is not something they can sell and get paid for,” said Tomas Kaberger, energy and environment professor at Chalmers University of Technology and a board member of Swedish nuclear operator Vattenfall.
“It is something they will have to spend a lot of money on to build a repository for that can last a few hundred thousand years,” Kaberger said.


Palantir listing may shine light on secretive Big Data firm

Updated 21 September 2020

Palantir listing may shine light on secretive Big Data firm

  • Palantir’s filing suggests a valuation of some $10 billion, down from a private value as high as $25 billion, according to Renaissance Capital

WASHINGTON: Perhaps the most secretive firm to emerge from Silicon Valley, Palantir Technologies is set for a stock market debut this month that may shed light on the Big Data firm specializing in law enforcement and national security.

Palantir platform has been used in the controversial practice of “predictive policing” to help law enforcement, detect medical insurance fraud and fight the coronavirus pandemic.

While Palantir’s data practices and algorithms are secret, the company claims it follows a road map which is, if anything, more ethical than its tech sector rivals.

It moved its headquarters to Denver this year, partly in an effort to set itself apart from its Silicon Valley rivals.

“Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments,” Palantir says in its prospectus. “From the start, we have repeatedly turned down opportunities to sell, collect or mine data.”

Palantir is opting for a direct listing, expected on Sept. 29. This will not raise capital but will allow shares to be traded on the New York Stock Exchange.

Palantir’s filing suggests a valuation of some $10 billion, down from a private value as high as $25 billion, according to Renaissance Capital.

The company posted a loss of $580 million last year on revenue of $743 million. But it sees prospects improving as it offers solutions to what it calls “fractured health care systems, erosions of data privacy, strained criminal justice systems and outmoded ways of fighting wars,” its regulatory filing says.

Palantir’s biggest shareholder is Peter Thiel, an early Facebook investor and one of the rare tech executives who backed Donald Trump’s campaign in 2016.

“We are in a deadly race between politics and technology,” Thiel wrote in a 2009 essay for the libertarian Cato Institute.

Activists argue that Palantir’s technology — which scoops up financial records, social media posts, call records and internet records — enables unprecedented opportunities for mass surveillance with little oversight on privacy and fundamental rights.

Human rights activists have staged protests against Palantir after US agencies used its technology to hunt down illegal immigrants in the United States.

The immigration rights activist group Mijente claims Palantir technology is used in operations to track and arrest thousands of people “just for being undocumented.”

Palantir is a major player in “predictive policing,” a technology which critics say can amplify bias in law enforcement.

A 2017 research paper by University of Texas sociologist Sarah Brayne found the Palantir platform can connect seemingly unrelated bits of data for investigators, but can also lead to “a proliferation of data from police” collected without a warrant.

Palantir does not apologize for its work in national security and law enforcement.

Palantir points out that it created a privacy and civil liberties board in 2012, ahead of most tech rivals. It also rejects working with China as “inconsistent with our culture and mission.”