LONDON, Nov 22 (Reuters) - U.S. bank Goldman Sachs Group Inc is putting its uranium trading business up for sale, a source familiar with the matter said on Friday.
The move comes as other U.S. banks, including JPMorgan Chase & Co and Morgan Stanley, look to exit physical commodity trading in the wake of increased government scrutiny and forecasts for tepid demand for certain commodities.
Goldman's decision was first reported by industry publication SparkSpread.
In the United States, power generators, including those who buy uranium to fuel nuclear reactors, are suffering from weak power prices, low growth in demand for electricity, and increased environmental regulations.
Historically weak natural gas prices due to record U.S. shale production is allowing gas to be competitive with certain types of coal and even some nuclear plants. This has resulted in the closure of some coal and nuclear plants.
Moreover, U.S. nuclear operators have to spend millions to upgrade their facilities to protect them from natural disasters like the earthquake and tsunami that damaged the Fukushima reactors in Japan.
Even though power companies are building five new reactors in the U.S. Southeast, analysts have said that unless something changes - new regulations limiting carbon emissions or a spike in gas prices - the amount of generation from nuclear power will continue to decline over time.
If that occurs, U.S. power companies will not need to buy as much uranium fuel.
But the nuclear renaissance is alive and well in the rest of the world, with more than 70 reactors under construction, mostly in China, Russia and India, which will require tons of uranium fuel to operate, according to data from the World Nuclear Association, an industry trade group.