By Greg Peel

In July last year, Japan restarted its Ohi 3 and 4 reactors and so brought to an end the post-Fukushima period of zero nuclear energy production in the country. The restart initially elicited a sigh of relief from the global uranium market given fears that this significant buyer of U3O8 would forever be lost, and that its supply stockpiles would hang over the market for a many a year.

The relief did not last long, given the then government baulked at further restarts due to a level of public opposition. But along came the new Abe government, running on a platform that included a commitment to nuclear energy. Yet still things have stalled, with early promise of more expedient restarts giving way to unclear signals from the government and ongoing mandatory stress testing of reactors.

Uncertainty with regard to Japanese policy has been the major driver of uranium price weakness in 2013.

Last week Ohi 4 was shut down again, following the shutdown of Ohi 3 earlier in the month. Once again, Japan is devoid of nuclear energy generation. However, in this case the shutdowns are representative of the regular 13 month inspection cycle and not reflective of any new policy development. The two reactors now have to undergo new and more stringent post-Fukushima stress testing but should be able to be restarted before year-end, it is assumed. Meanwhile, Prime Minister Abe has ordered the decommissioning of all six Fukushima reactors, despite only 1-4 being due for decommission.

While a nuclear-free Japan might be enough to make the uranium market once again despondent, this assumed temporary setback has not dulled the tentative emergence of renewed confidence. Utilities and speculators lined up in the market on the buy-side last week, industry consultant TradeTech reports, following the previous week's slight tick-up in price.

Transactions totalled 900,000lbs of U308 equivalent, which is 300,000lbs more than the week before. Several utilities remain in the market seeking spot delivery while in the term market, reports TradeTech, demand is being bolstered by intermediaries looking to buy and hold. The result is US90c increase in TradeTech's spot price indicator to US$35.25/lb while the consultant's term indicators are unchanged for now at US$38.00/lb (mid) and US$53.00/lb (long).

Year to date volume in the spot market now stands at 29.8mlbs compared to 18.9mlbs at the same time last year.

In political news, the new Coalition government in Australia has assured India the supply deal signed by the previous Labor government will not be reviewed, which is of little surprise. Of more surprise was the vote by UK government coalition party, the Liberal Democrats, to accept nuclear power, representing a reversal of the party' long held anti-nuclear policy.