By Greg Peel

A month ago there appeared to be some building interest from buyers in the short-term uranium market, and sellers were thus encouraged to hang back rather than let product go at low prices. But a hoped for rally in the uranium spot price failed to materialise, with one big order withdrawn and remaining orders failing to satisfy all sellers. The week before last, the spot market went ominously quiet. Last week, the sellers caved.

Industry consultant TradeTech reports six transactions in the spot market last week totalling 700,000lbs of U3O8 equivalent. Traders and utilities on the buy-side were happy to let the sellers close the gap, with both traders and producers looking to dispose of product ahead of year end. As a result, TradeTech's spot price indicator fell US40c to US$34.85/lb.

One transaction was concluded in the term market last week, TradeTech reports, with a Russian producer contracting to supply first fuel for two new reactor units in China. There are various other contracts being evaluated by term buyers at present, but TradeTech's term price indicators remain unchanged at US$38/lb (mid) and US$51/lb (long).

The world continues to await news on any escalated plans from Tokyo to restart Japan's reactors, but with popular dissent still an issue it would not have helped the government's cause that a magnitude 7.1 earthquake was registered off the east coast of Japan on October 25. The Fukushima plant suffered no further damage, but the quake was a reminder that aftershocks are expected to continue even this long after the 2011 disaster.

And to top things off, residents of a small Japanese island were preparing to evacuate late last week as Typhoon Francisco approached. The typhoon was ultimately downgraded, but not before TEPCO was forced to take additional precautions at Fukushima to prevent the possible overflow of accumulated radioactive water.

On the supply side, BHP Billiton ((BHP)) reported last week that uranium production at the world's largest operating uranium mine, Olympic Dam, fell 6% in the September quarter due to lower grades and planned maintenance. Rival diversified miner Rio Tinto ((RIO)) had reported earlier that its quarterly uranium production fell 23%, largely as a result of the process of low grade stockpiles at majority-owned Energy Resources of Australia's ((ERA)) Ranger mine, but also through lower production at the company's Rossing mine in Namibia.

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