CASPER, Wyo. (AP) — Some uranium producers in Wyoming say they're being affected by weak demand that has caused prices for the nuclear fuel to slip to their lowest level in eight years.
Spot prices for yellowcake are down to $28 per pound. That's as low as they've been since 2006 and down from $75 per pound in 2011.
Prices are weak while Japanese nuclear plants remain shut down following the Fukushima nuclear disaster in 2011. Meanwhile, U.S. utilities largely have booked their uranium purchases through 2016, meaning there is little demand for additional yellowcake on the spot market.
"Although there is a long-term supply deficit, the current situation is that we have oversupply due to excess inventories," said Rob Chang, an industry analyst at the New York-based investment firm Cantor Fitzgerald.
Wyoming is among the top uranium-producing states. Wyoming's uranium mines employ a process of dissolving uranium out of underground deposits and then pumping the ore-containing solution to the surface through wells.
Uranium One has stopped drilling new uranium wells and laid off eight employees since last year, said Donna Wichers, Uranium One vice president for the Americas.
"At $28 a pound you can imagine what that is doing to us," Wichers said.
Uranium One produced nearly 1 million pounds of uranium at its Willow Creek facility last year. The company expects to produce about 550,000 pounds this year.
Another company, Ur-Energy, has secured long-term contracts at higher prices that provide a buffer against low spot prices, CEO Wayne Heili said.
"Because of the cost structure and the contracts we have, we will be able to hold on and maybe even grow a little bit," Heili told the Casper Star-Tribune (http://bit.ly/1gDwUC7 ).
There may be cause for optimism in the industry. The Japanese government has announced it might soon restart some of its nuclear plants.
Demand from American utilities also is expected to pick up in 2016 when power companies begin booking new contracts.