By Rudi Filapek-Vandyck

It has taken a while but it would appear general interest in uranium and shares of uranium companies is picking up again. After all, it has been three years since spot uranium peaked at US$136/138/lb in 2007.

Various newsletters and stockbrokerages have put in their best effort these past weeks to push the uranium sector back on the radar of their readers and clientele. So what has changed? In one word: China. Finally, Chinese buyers are emerging and they are negotiating long term contracts with the likes of industry bellwether Cameco.

This has reinvigorated interest in uranium and uranium stocks in general, as shown by the fact that many share prices across the sector have been rallying these past weeks. But has the spot price moved yet?

That is an interesting question. So far, all excitement has been based upon market signals, market rumours and investor speculation. Both spot prices as set by industry consultants TradeTech and Ux Consulting failed to follow suit.

At least, that was the situation until last week. TradeTech has now lifted its spot price benchmark for the week ending Friday by a full US$2 to take it to US$43.50/lb. No doubt, many investors who hopped on the uranium bandwagon earlier this month are hoping this jump will be nothing but the beginning of another extended price rally.

As one market observer put it recently: relatively small changes to the uranium spot price can have much larger flow-on effects for share prices. Well, the spot price is finally moving upwards again, and a US$2 jump is quite a big one.

TradeTech for its part reports the week ending Friday marks the single largest increase in its proprietary Spot Price Indicator since October 2009, when the price increased from US$47.50 to US$50.00 per pound U3O8.

Adding to the overall buoyant mood is the fact that some suppliers have experienced various hiccups recently, feeding overall expectations that present supply projections for the years ahead will fall short while Asian utilities plan to step up their buying activity.

Overall market indications seem positive with TradeTech reporting new buyers have emerged in the market these past weeks, while the number of registered spot market deals rose to seven transactions

last week, good for over 800,000 pounds U3O8 changing ownership.

Most experts have penciled in price projections of US$50/lb and more for calendar 2011, so there remains quite some potential for future price rises.

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