By Andrew Nelson

Last week was a slow, if not somewhat significant week on the uranium spot market. Slow because only three deals were done, with just 300,000 pounds U3O8 changing hands. Significant because there is a new US Secretary of Energy, and more so because China confirmed at last week's ninth Annual China Nuclear Energy Congress it had officially re-started its nuclear program .

Industry consultant TradeTech reports China quietly restarted its nuclear build program back in November 2012. The goal is to lift the country's total installed nuclear generation capacity to around 60GW by 2020. China has 30 reactors under construction right now, which represents about 40% of global nuclear power construction presently.

These plans will of course require significant uranium resources over the next 60 years, with demand pegged 39 million pounds U3O8 by 2020. To ensure the demand is met, China's CGNPC Uranium Resources Company will look to invest in the development of domestic and overseas uranium resources, including projects that are already under development in Australia and Africa.

As part of a round table at the conference, Cameco President James Dobchuk confirmed that the current market does not in any way support the production that is needed for future uranium supply.

The head of CGNPC, Mr. Zhou Zhenxing, agreed, but also noted today's market price is not that significant, as he believes it there is enough upside for continuing development. However, he also concurs with Dobchuk that price improvement is needed to stimulate new production for the future.

Still, China's pledge to maintain what is an ambitious nuclear program has certainly sparked some optimism amongst uranium producers and sellers. They were reluctant to lower offer prices before even though we're heading into the summer season, a traditionally slow time in the uranium market.

TradeTech did have some interesting analysis that should prove insightful, if not useful, over the next few months. As noted earlier, summer is traditionally a slower period for uranium. However, TradeTech notes the summer months are not nearly as predictable as conventional wisdom would suggest.

After taking a closer look at monthly spot transaction volumes over the summer months of the past five years, it turns out the June, July, and August period ran above average in 2009, and was very active in 2010. TradeTech suspects an increasing number of sellers believe this could be the case in 2013 as well. There remains a growing expectation for new demand to enter the market, with several utilities considering discretionary purchases at the moment.

This new found optimism was evident last week, even in the limited transactions and slim volumes were booked. Deals were conducted at or near the prevailing spot price, which meant by the end of the week there was no change to TradeTech's Weekly U3O8 Spot Price Indicator, which stayed put at US$40.75 per pound.

There was no activity in the term market. As such, TradeTech's Mid-Term U3O8 Price Indicator remains at US$44.00 per pound, while the Long-Term Indicator stayed put at US$57.00 per pound.