[en] This article discusses options trading in the nuclear fuels industry. Although there now exists no formal options market in the nuclear industry, flexibilities, or embedded options, are actually quite common in the long-term supply contracts. The value of these flexibilities can be estimated by applying the methods used to evaluate options. The method used is the Black-Scholes Model, and it is applied to a number of examples

[en] In November 1992, AlliedSignal (Allied) and General Atomics (GA) formed a conversion marketing partnership, known as ConverDyn. The venture was formed to market UF₆ conversion services following the closure of the Gore, Oklahoma, conversion facility operated by GA's wholly owned subsidiary, Sequoyah Fuels Corporation (SFC). The closure of the Gore facility occurred after an extended period of regulatory snarls that resulted in production outages and substantial expense. The loss of SFC's capacity (9,100 MTU nameplate) brings conversion supply and demand more into balance after many years of significant oversupply. In the past two months, spot prices have increased more than 30 percent, yet prices in the USA still lag those observed in Europe. However, the conversion market is still fraught with uncertainty in the face of weapons dismantlement, the availability of low-enriched uranium (LEU) products, and the potential for increased capacity from other countries

[en] This article reviews a number of forecasting methods that have been applied to uranium prices and compares their relative strengths and weaknesses. The methods reviewed are: (1) judgemental methods, (2) technical analysis, (3) time-series methods, (4) fundamental analysis, and (5) econometric methods. Historically, none of these methods has performed very well, but a well-thought-out model is still useful as a basis from which to adjust to new circumstances and try again

[en] The negotiations leading up to the Suspension Agreement with Russia focused solely on uranium and SWU, leaving conversion in its traditional role as the overlooked constituent of the fuel cycle. In fact, the initial agreement did not even distinguish U₃O₈ from UF₆; it effectively ignored the conversion component contained in UF₆ and the possibility of matched conversion sales. After some criticism from ConverDyn and others, The US Department of Commerce issued a clarification, confirming that all three major components of the fuel cycle can be sold under matched sales agreements. However, matched conversion sales remain somewhat of an enigma as few have been done and the logistics are poorly understood. Nonetheless, in a conversion market where supply and demand are closely balanced, secondary supplies, including those from matched sales, will likely play an important role in the evolution of conversion prices

[en] In a modern futures market, standardized contracts for future delivery of a commodity are traded through an exchange that establishes contract terms and the rules of trading. The futures contract itself is simply an agreement between a buyer and a seller in which the seller is obligated to deliver and the buyer is obligated to accept a predetermined quantity of a specified commodity at a given location on a certain date in the future for a set price. Organized futures markets aid in price discovery; provide a risk management tool for those with commercial interests in a commodity; create speculative opportunities; and contribute to competitiveness, efficiency, and fairness in trading. There are, at present, no standardized futures contracts in the nuclear fuel industry, although the concept has been discovered for years. The idea has been raised again recently in relation to the disposition of Russian uranium. Some adaptation of traditional futures contracts, traded on an exchange composed of nuclear fuel industry participants, could provide many of the benefits found in other commodity futures markets