Commodities | Jan 27 2010
By Andrew Nelson
With only a handful of deals reported last week, the uranium spot price continued its new year retreat. Industry consultant TradeTech’s U3O8 Spot Price Indicator showed a decline of US$1.25/lb to US$42.50/lb over the course of last week.
There were only three transactions reported in the week ending Friday, which involved less than 600,000 pounds U3O8 equivalent. The buyers included utilities and intermediaries and even while Trade Tech notes that five utilities are currently seeking offers for just over one million pounds U3O8, offers by a number of sellers that were below-market prices were unable to attract increasingly price concious buyers.
It is the discretionary nature of current demand that is encouraging sellers to further discount their material in an effort to generate some turnover. However, the continuing trend of discounting is making a major contribution to the downward pressure on the consultant’s Spot Price Indicator.
TradeTech does expect new demand to emerge in coming weeks from both the utility and non-utility sectors, including potential purchases by Uranium Investment Corp. However, without any real demand currently present in the market, the consultant expects spot uranium prices will remain soft in the weeks ahead.
The term uranium market was even quieter, with no new demand or transactions reported in the term market last week. So while there are several utilities continuing to look at mid and long-term offers, TradeTech’s U3O8 Long-Term Price Indicator remains firmly set at US$60.00/lb. The conversion and enrichment markets were similarly quiet last week, with no new activity reported.
