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JSC TECHSNABEXPORT (TENEX) - The Leading Russian Supplier of Nuclear Fuel Cycle Products and Services
April, 2011
Moscow
TENEX on the World Nuclear Fuel Market: Looking into the Future
Andrey TovstenkoHead of Marketing and Business Strategy DirectorateJSC TECHSNABEXPORT
ATOMEXPO-2013Saint Petersburg, Russia, June 2013
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1963
1971
1973-1976
1987
1990
1993
1995
1999
2009
2012
TENEX Market Chronology
UAE
USA(Resumption of Commercial Activity in accordance with the Amendment to the Suspension Agreement)
Japan
South Africa
Republic of Korea
The Beginning of Natural Uranium Deliveries to theUSA & Europe
USA
Europe (other countries)
France(The first SWU Contract)
TENEXestablishment
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TENEX’s Market Presence Evolution
1975 2000 20120%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
9%
31% 33%
91%
69% 67%
TENEX Others
1975 2000 2012
100%
38%48%
57% 36%
5%16%
Europe America Asia-Pacific and Africa
Western SWU market structure
TENEX has gained a significant share of the global market for the NFC goods and services. Its geographical market presence gradually becomes more diversified
Geographical Structure of TENEX’s Export
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Key Market Trends: Nuclear Power Development
Referenced sources forecast long-term growth of nuclear energy in all scenarios (excl. WNA low),
Asian countries, inclusive China, India and Middle East will be the main drivers for nuclear energy.
Growth rate will mostly depend on such factors as energy consumption, competition from other energy sources (gas, oil, etc.) and ecological aspects.
The general increase of NPPs fleet will result from the fact that this industry provides clean and reliable source of energy.
America Europe Asia&Africa0
50
100
150
200
250
300
120 11482
137 112
274
Non-Russian Design Nuclear Capacities
2013 2030
Gwte
2013, June 2015 2020 2025 2030240
290
340
390
440
490
540
590
640
690
740
790
840
WNA-2011 ref, IAEA-2012 ref, UxC-2013 ref, WEO-2012
WNA-2011 (upper)
WNA-2011 (low)
UxC-2013 (high)
UxC-2013 (low)
IAEA-2012 (max)
IAEA-2012 (min)World372.7
Non-Russian Design Reactors316
World Nuclear Generation CapacitiesGWte
Source: Uranium Requirements Model published in UxC URM Report Q1 2013.
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Key Market Trends: Enrichment & Natural Uranium
• Nuclear newcomers from emerging markets drive demand increased demand for integrated products • Transition period from gas diffusion to gas centrifuge completed in the long-term suppliers will compete in new market environment
• Number of suppliers increases [Ex.: enrichment services sellers to US utilities: 5 in 2005, 7 in 2009, 11 in 2012 (source: EIA)]
competition increases approved and reliable suppliers preferred
• Downward pressure on natural uranium and SWU prices during recent period
possible market instability in the mid-term
• Kazakhstan is making the great contribution in the world uranium mining while many miners in other countries have cancelled or delayed expansion of uranium production
100
110
120130
140
150160
170
Ux SWU Price
3035404550556065707580
Ux NatU LTUx NatU Spot
SWU Prices, $/SWU
Natural uranium prices, $/lb
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Key Market Trends: Possible Instability
January 200404 Декабрь 05 Ноябрь 06 Октябрь 07 Сентябрь 08 Август 09 Июль 10 Июнь 11 Май 12 Апрель 13 Март0
20
40
60
80
100
120
140
160
Natural Uranium Spot Price Since 2004
$/lb
Low Price Periods
Price Spikes
Periods of low-price lead to discourage of producers and make them to decrease production. This in its turn result in lack of material on the market, price spikes and unstable market situation
Fair price level provides sustainable market development and therefore it is favorable both for suppliers and customers (this is also true in case of SWU market)
Janu
ary
2004
Apr
il 20
04Ju
ly 2
004
Oct
ober
200
4Ja
nuar
y 20
05
Apr
il 20
05
July
200
5O
ctob
er 2
005
Janu
ary
2006
Apr
il 20
06Ju
ly 2
006
Oct
ober
200
6Ja
nuar
y 20
07
Apr
il 20
07Ju
ly 2
007
Oct
ober
200
7Ja
nuar
y 20
08
Apr
il 20
08Ju
ly 2
008
Oct
ober
200
8Ja
nuar
y 20
09A
pril
2009
July
200
9O
ctob
er 2
009
Janu
ary
2010
Apr
il 20
10Ju
ly 2
010
Oct
ober
201
0Ja
nuar
y 20
11
Apr
il 20
11Ju
ly 2
011
Oct
ober
201
1
Janu
ary
2012
Apr
il 20
12Ju
ly 2
012
Oct
ober
201
2Ja
nuar
y 20
13A
pril
2013
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Market Trends: SWU Market Supply/Demand Balance (World market without the segment of Russian Design Reactors)
By the end of the current decade considerable amount of primary (Western) and quasi-primary (HEU-LEU) supply exits the market (over 20M SWU), ~25M SWU new capacity is expected to come on stream
Net supply increase is forecasted at 5.2 M SWU, as net demand increase will amount 18.9 M SWU For the sustainable SWU market development it is critical to fill the gap by mainly primary sources of supply Russian Enrichment Industry is capable to contribute to this task both in medium- and long-term perspective
Change in Non-Russian reactors SWU demand, primary (effective capacities) and quasi-primary (HEU-LEU) supply (excluding Russian commercial EUP/SWU export) by 2020, 2010 = base year
Supply Demandmln. SWU
-10
-20
-30
10
20
30
Totalout:-20.4
Totalin:
+25.6Net:+18.9
GB I- 8
Paducah-6
HEU-6.4
Net:+5.2
ETC+ 16
Otherexpansions
+ 5.6
ACP, SILEX+ 4
Sources:- Demand: Uranium Requirements Model published in UxC URM Report Q1 2013, recalculated at current optimal tails assay (0.223%)- Supply: UxC Enrichment Market Outlook Q1 2013 (expected
enrichment supplies) and TENEX estimates (old GDP projects)
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Main Direction
s
Direct relationship with utilities
Priority to long-term contracts
Promotion of products with the maximum added value
Strategic partnerships with nuclear fuel cycle products and services suppliers
Flexible approaches based on priorities of the clients
Overseas sales network
Advantages of Russian geographical location
Transport and logistics infrastructure
Overseas stockpiles of uranium
Specific attention to regional market features
TENEX Business Development
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Market Instruments: Recent Developments (1)
Material Account System Development
Legal framework on the importation of uranium from Australia, Canada and the U.S. to Russia, “1-2-3 Agreement” between Russia and Japan
First shipment of natural uranium from Australia in November 2012
First shipment of Russian EUP through Russian Far East Port in October 2012
Opening of TENAM Corporation office in Washington DC
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Conversion-enrichment plant
Tokyo Port, Japan
EUP trial delivery to Japan through Russian Far East Port
Enrichment plant
Adelaide Port, Australia
Far East Port, Russian
Federation
Saint-Petersburg Port,
Russian Federation
Natural Uranium Trial Delivery to the Russian
Federation from Australia
Market Instruments: Recent Developments (2)
Material stock accounts system Enhancement
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Market Instruments: Recent Developments (3)
EUP Trial Delivery demonstrated the efficiency of new Russian Far East Nuclear Materials Transportation Route
Vostochny Port
Transport and logistics infrastructure development: Far East Nuclear Materials Transportation Route
Implementation of the Enriched Uranium Product Trial Delivery through Russian Far East Port
Start of activities in Far East in 2010
Russian port of Delivery: Vostochny port
Delivery time: reduced about 3 times Experience in obtaining of all necessary licenses and authorizations in Russia
(including licenses for stevedoring company in Vostochny port and for sea carrier)
IZOTOP Company assistance for trial delivery via Vostochny port
Partnering with the largest Far East Container Terminal – LLC “Eastern Stevedoring Company”
Benefits: - Shipping points diversification- Reliability of supply improving
- Delivery time shortening- European NFC products and services transit to Asia is
possible
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Development of the Natural
Uranium Delivery System
November 2012 - The first shipment of Australian natural uranium to the Russian Federation under a 2007 bilateral nuclear cooperation agreement
Benefits: Enriched uranium and enrichment services contracts with increased contract terms flexibility in regards of using customer owned natural uranium of different origins
Material Account System
Delivery Management Agreements with all US and European Fuel Fabricators
Further Flexibilities Development in Process
Benefits:More flexibility in delivery terms
Improvement of the service quality in the field of nuclear materials transportation and product delivery
Market Instruments: Recent Developments (4)
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TENEX’s Overseas Sales Network
TENEX-Korea (Seoul, Republic of Korea)
INTERNEXCO(Frankfurt, Germany)
TENEX-Japan(Tokyo, Japan)
TENAM(Bethesda, USA)
TRADEWILL(London, United Kingdom)
2012
TENEX-Japan – the first direct contract execution with the delivery at Japanese fabricator
TENAM Corp. – Signing of EUP supply contract with a US utility under the Russian Suspension Agreement, as amended
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THANK YOU FOR YOUR ATTENTION !