Commodities | Apr 06 2010
By Chris Shaw
The uranium market has been quiet since the end of March, industry expert TradeTech's indicator of spot prices falling by US$0.25 over the last week to US$41.50 per pound. This is despite no transactions or new demand being recorded in the spot market.
According to TradeTech, a key recent feature of the market has been sellers showing a greater willingness to lower prices in order to finalise deals. This is a move away from the prevailing trend of March, which saw stronger demand pushing up spot prices as sellers held firm to offer prices.
Even though sellers generally held the line on pricing, there was a narrowing of the price gap between willing buyers and sellers in March, TradeTech noting this was the result of higher prices drawing additional supply into the market.
This means buyers and sellers are now negotiating over US$0.25-$0.50 price increments in deals, which compares to the US$0.75-$1.25 increments that were the norm at the beginning of March.
At the end of March, TradeTech notes five buyers were active in the spot market, with interest in amounts of material ranging from more than 250,000 pounds to as much as 950,000 pounds.
In the term market buyers are estimated to be looking for a total of up to 6.6 million pounds of material for delivery between 2011-2015. TradeTech expects several other utilities will enter this market in coming weeks.
On the supply side the industry consultant estimates there is presently three million pounds of uranium available for delivery within the next year.
Given the lack of activity in the market in recent sessions there are no changes to TradeTech's medium and long-term price indicators, which stand at US$50 per pound for the former and US$60 per pound for the latter.
The fall in TradeTech's weekly spot price indicator follows weakness in the weekly spot price benchmarks as published by peer Ux Consulting. Last week, UxC lowered its weekly benchmark by US$0.25 to US$42.00.
