Uranium Buyers And Sellers Move A Little Closer
By Andrew Nelson
No matter where you look, or what you read, or whom you talk to; analysts, commentators and investors alike remain guardedly optimistic about the prospects for a rise in uranium prices in the not too distant future. In the meantime, the spot price has traded within a US$5 band of US$50 dollars for more than a year now.
The latest bit of indicative optimism is news that Canadian miner Cameco is on a bit of a buying spree that started with a $430 million bid for BHP Billiton's ((BHP)) Yeelirrie project a few weeks back. U308.com reports the company intends to nearly double its production by 2018 to take advantage of anticipated increasing demand and expected supply shortfalls.
In the meantime, the spot market languishes. Industry consultant TradeTech reports there were just six transactions totalling over 750,000 thousand pounds U3O8 that were conducted last week in the spot uranium market. There was a broad mix of market participants, with utilities, producers, traders and financial entities joining in on the fun.
TradeTech notes prices were flat over the course of the week, with the bulk of material sold at, or very close to Friday's finishing price of US$48.00 per pound. Last week's spot price was thus unchanged from the week prior's.
Once again, transaction volumes were small compared to the weekly volumes posted earlier this year, but TradeTech still thinks the market is starting to break out of the summer doldrums, as both buyers and sellers seem to be reaching agreements on pricing a little more easily than has recently been the case. And if you want to take anything away from last week's spot trading, this is it, as it is beginning to appear the spread between willing buyers and willing sellers is starting to narrow a little bit more than it certainly has over the past few months.
There is also the chance of a bit of positive news flow from the sector this week. The World Nuclear Association's Annual Symposium in London is kicking off this week. And with the market increasingly expecting a rise in activity, developments in Japan and its looming announcement on future energy policies will also be highly anticipated.
There was a little more activity than normal on the term market last week, with four transactions reported. TradeTech notes the buyers were utilities and financial entities. There was also some new demand, with a US utility looking for more than 1m pounds and a non-US utility also expected to enter the market soon.
The activity has yet to flow through to prices, however, with both the mid-term and long term price indicators remaining fixed at US$51.75/lb and US$60.00/lb respectively.
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