Nuclear Equities: The Week Of June 11-17, 2012

Includes: BP, ES-OLD, LEU, NLR, UEC, URA
by: NEIG

Despite the traditionally slow summer season, it was an eventful week for the nuclear industry. Here are a few interesting bits & pieces that we have seen the week of June 11-17, 2012.

  • According to the newly released BP's (NYSE:BP) Statistical Review of World Energy, 2011 global nuclear output fell by 4.3%, the largest decline on record on the back of sharp declines in Japan (-44.3%) and Germany (-23.2%). U.S. nuclear output has also declined by -2.1%. Notable increases were recorded in China (16.9%), the U.K. (11.1%) and France (3.2%). (learn more)
  • Spot uranium price slightly rebounded to $51/lb from the price slip a week before. Term price indicator remains the same at 61.50 (UxC) / $61 (Tradetech). (learn more)
  • The unexpected announcement of management changes and a sizable guidance reduction drove EnergySolutions (NYSE:ES-OLD) shares sharply down (over 50%) this week. S&P lowered ES' corporate credit rating by two notches to "B" from "BB-", implying 5% increase in the probability for a default. In a similar move, Moody's downgraded ES' corporate rating from "B2" to "B3". The company's ratings have been placed under review for possible further downgrade. (learn more)
  • USEC (USU) and the DOE signed a $350m RD&D agreement to test the commercial viability of ACP with expected completion by May 2014; 80% of the funding will be provided by the DOE and the balance by USEC. 2013 funds still need Congressional approval. (learn more)
  • Japan has made progress in preparing the restarts of two nuclear plants (the first Japanese reactors to restart since the Fukushima accident in March 2011). The key question is how fast and how many restarts will follow. (learn more)
  • Uranium Energy (NYSEMKT:UEC) Corp provided production and permitting update. UEC shares declined as the company production ramp up fell short of investor and analyst expectations. CIBC, RBC and GHS lowered their respective price targets for UEC. (learn more)
  • Nuclear energy ETF funds flow was flat to slightly down during the week. Market Vectors Uranium+Nuclear Energy ETF (NYSEARCA:NLR) recorded a small outflow of $0.7MM, while Global X Uranium ETF (NYSEARCA:URA) funds flow was unchanged from the previous week.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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