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.
Japanese utilities start selling uranium fuel into depressed market
Japanese utilities start selling uranium fuel into depressed market
- Sales by Japanese utilities “are definitely showing up more in the market”
AI will never replace human creativity, says SRMG CEO
- Speaking to Maya Hojeij, senior business anchor at Asharq with Bloomberg, Jomana R. Alrashid expressed pride in SRMG platforms that had absorbed and adopted AI
RIYADH: Jomana R. Alrashid, CEO of Saudi Research and Media Group, highlighted how AI cannot replace human creativity during a session at The Family Office’s “Investing Is a Sea” summit at Shura Island on Friday.
“You can never replace human creativity. Journalism at the end of the day, and content creation, is all about storytelling, and that’s a creative role that AI does not have the power to do just yet,” Alrashid told the investment summit.
“We will never eliminate that human role which comes in to actually tell that story, do the actual investigative reporting around it, make sure to be able to also tell you what’s news or what’s factual from what’s wrong ... what’s a misinformation from bias, and that’s the bigger role that the editorial player does in the newsroom.”
Speaking on the topic of AI, moderated by Maya Hojeij, senior business anchor at Asharq with Bloomberg, the CEO expressed her pride in SRMG platforms that had absorbed and adopted AI in a way that was “transformative.”
“We are now translating all of our content leveraging AI. We are also now being able to create documentaries leveraging AI. We now have AI-facilitated fact-checking, AI facilities clipping, transcribing. This is what we believe is the future.”
Alrashid was asked what the journalist of the future would look like. “He’s a journalist and an engineer. He’s someone who needs to understand data. And I think this is another topic that is extremely important, understanding the data that you’re working with,” she said.
“This is something that AI has facilitated as well. I must say that over the past 20 years in the region, especially when it comes to media companies, we did not understand the importance of data.”
The CEO highlighted that previously, media would rely on polling, surveys or viewership numbers, but now more detailed information about what viewers wanted was available.
During the fireside session, Alrashid was asked how the international community viewed the Middle Eastern media. Alrashid said that over the past decades it had played a critical role in informing wider audiences about issues that were extremely complex — politically, culturally and economically — and continued to play that role.
“Right now it has a bigger role to play, given the role again of social media, citizen journalists, content creators. But I also do believe that it has been facilitated by the power that AI has. Now immediately, you can ensure that that kind of content that is being created by credible, tier-A journalists, world-class journalists, can travel beyond its borders, can travel instantly to target different geographies, different people, different countries, in different languages, in different formats.”
She said that there was a big opportunity for Arab media not to be limited to simply Arab consumption, but to finally transcend borders and be available in different languages and to cater to their audiences.
The CEO expressed optimism about the future, emphasizing the importance of having a clear vision, a strong strategy, and full team alignment.
Traditional advertising models, once centered on television and print, were rapidly changing, with social media platforms now dominating advertising revenue.
“It’s drastically changing. Ultimately in the past, we used to compete with one another over viewership. But now we’re also competing with the likes of social media platforms; 80 percent of the advertising revenue in the Middle East goes to the social media platforms, but that means that there’s 80 percent interest opportunities.”
She said that the challenge was to create the right content on these platforms that engaged the target audiences and enabled commercial partnerships. “I don’t think this is a secret, but brands do not like to advertise with news channels. Ultimately, it’s always related with either conflict or war, which is a deterrent to advertisers.
“And that’s why we’ve entered new verticals such as sports. And that’s why we also double down on our lifestyle vertical. Ultimately, we have the largest market share when it comes to lifestyle ... And we’ve launched new platforms such as Billboard Arabia that gives us an entry into music.”
Alrashid said this was why the group was in a strong position to counter the decline in advertising revenues across different platforms, and by introducing new products.
“Another very important IP that we’ve created is events attached to the brands that have been operating in the region for 30-plus years. Any IP or any title right now that doesn’t have an event attached to it is missing out on a very big commercial opportunity that allows us to sit in a room, exchange ideas, talk to one another, get to know one another behind the screen.”
The CEO said that disruption was now constant and often self-driving, adding that the future of the industry was often in storytelling and the ability to innovate by creating persuasive content that connected directly with the audience.
“But the next disruption is going to continue to come from AI. And how quickly this tool and this very powerful technology evolves. And whether we are in a position to cope with it, adapt to it, and absorb it fully or not.”
