Areva - Reference Document 2016
06
BUSINESS OVERVIEW
6.4 Operations
Suppliers The risk of supply interruptions for the chemical reagents needed for its production operations is minimized by contracting with suppliers based in Europe and in the rest of the world.
The current production capacities of AREVA’s competitors are thus estimated as follows according to UxC:
p 11,500 metric tons for TVEL; p 15,000 metric tons for Converdyn; p 12,500 metric tons for Cameco; and
Market and competitive position
p 5,000 metric tons for CNNC.
Conversion market Annual world conversion requirements were estimated at approximately 62,000 metric tons of natural UF 6 in 2016 ( source: WNA 2016 ), including 18,000 metric tons in Western and Central Europe (Euratom area). China’s conversion requirements are rising quickly, largely contributing to the growth in global demand for these services. According to the World Nuclear Association (WNA), Chinese demand for UF 6 will be about 11,400 metric tons in 2020 ( source: WNA 2015 report, reference scenario ). The conversion market has seen a recent drop due to excess capacity which should last for several more years in view of the persistence of secondary materials and utility inventories, in particular those of the Japanese utilities affected by the outage of a significant share of their nuclear fleet. Nevertheless, the gap between spot indicators and long-term indicators reflects the perception of the conversion market’s long-term fragility related to the need to replace aging production plants.
It should be noted, however, that most of the plants do not operate at their nominal capacity. The plants in the Western countries have operated at an average of 60% of their nominal capacity over the past ten years, mainly due to outages for maintenance and safety upgrades. AREVA’s production was close to 90% of its nominal capacity during that same period. Enrichment market Annual world enrichment requirements were estimated at 48.9million SWU in 2016, including 14.2million SWU inWestern Europe ( source: WNA 2016 ). Market volume will grow slowly, pushed by Chinese and South Korean demand. The market is traditionally regulated by geopolitical considerations, but they have less and less impact. In Europe, the Euratom Supply Agency monitors supplies of uranium and enrichment services. Deriving from the Euratom Treaty, its missions cover the security of supply of nuclear fuel materials in particular. In the United States, since the US Congress amended the Suspension Agreement in 2008, the Russian supplier Rosatom was allowed to supply up to 20% of the US utilities’ requirements starting in 2014 and signed several contracts with these customers. Rosatom’s competitors are unable to access the uranium enrichment market in Russia at this time.
CONVERSION PRICES (LONG-TERM AND SPOT)
USD / kgU of UF 6
18
16
COMPETITIVE POSITION IN ENRICHMENT
14
12
Operator
Estimated installed capacity
Process
10
Georges Besse II (France)
7.5 million SWU/year Centrifugation 26.0 million SWU/year Centrifugation
8
Rosatom (Russia)
Urenco (UK, Germany, Netherlands, USA)
6
18.9 million SWU/year Centrifugation 5.6 million SWU/year Centrifugation 0.6 million SWU/year Centrifugation
4
CNNC (China)
2
Other (Japan, Brazil)
TOTAL (2016)
58.6 MILLION SWU/YEAR
0
Source: AREVA estimates based on available data. AREVA, Urenco, TVEL, CNNC andCentrus are the leading players in the enrichment market. The Georges Besse II plant reached its nominal capacity of 7.5 million SWU per year in 2016. TVEL and Urenco recently announced that they have initiated advanced assessments on the reduction of their capacity in order to adapt to the volumes of the US and European markets. In the former countries of the USSR, for historical reasons, demand is chiefly met by Rosatom, whose enrichment plants are split among four combines: Angarsk, Zelenogorsk, Seversk and Novouralsk. All of these plants use centrifugation technology.
Jan. 10
Jan. 13
Jan. 14
Jan. 15
Jan. 16
Jan. 05
Jan. 06
Jan. 07
Jan. 08
Jan. 09
Jan. 11
Jan. 12
Dec. 16
CV EU Spot
CV NA Spot
CV NA LT
CV EU LT
Source: UxC.
Competitive position in conversion With nominal production capacity of 14,000metric tons of UF 6 in 2016, NewAREVA Holding is a major global player in conversion services. Its main competitors are TVEL in Russia, Converdyn in the United States and Cameco in Canada. The State- owned China National Nuclear Corporation (CNNC) still has limited capacity, but strong growth potential for the future.
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2016 AREVA REFERENCE DOCUMENT
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