Commodities | May 07 2013
By Andrew Nelson
April was a funny old month for uranium. After a couple of mostly flat months in February and March, uranium prices dropped through most of April. Demand in general was fairly thin and “got to have it” demand was really not there at all.
Last month saw a total of 17 deals concluded, which in turn generated about 2.4 million pounds of U308 equivalent turnover.
The buyers that did emerge were generally more interested in deliveries towards the year end and early next year. Industry consultant TradeTech notes it was this distinct lack of near term buyers coupled with news of new problems with import licenses at the Chinese border that prompted sellers to lower offer prices. At one point over April, prices had fallen low enough to test US$40/lb, but did not break through.
By the end of April the lower prices did start to draw out some buyers and as soon as they were seen, sellers pulled back prices and started to draw them higher. At the end of the month, TradeTech’s Exchange Value was sitting at US $40.50/lb, which was down US$1.75/lb from the March 31 Value.
Activity in the term uranium market was even slower in April, with only one mid-term delivery transaction booked for the month. TradeTech notes there are still a few utilities that continue to evaluate whether or not to enter the market, but they haven’t yet. The one deal saw TradeTech's Mid-Term U3O8 Price Indicator drop US $2.00 to US$44.00/lb. The Long-Term Price Indicator was unchanged from March’s US$57.00/lb.
Last week saw the spot uranium price tick a little higher on the back of six deals that saw 900,000 pounds of U3O8 equivalent change hands. TradeTech reports that the buyers included utilities and traders, while the sellers were mostly producers and traders.
There was a little change in demand dynamics from last month as well, with a number of buyers looking for delivery sooner rather than later. Still, the majority are still looking for deliveries later in the year, or early next. This hasn’t done much damage to the price, though, as TradeTech notes the most aggressively priced material was pretty much cleared over April, with the sellers still standing given a little space to lift prices through last week.
By last Friday’s close, TradeTech’s Weekly U3O8 Spot Price Indicator was at US$40.60/lb, a modest rise of US$0.10 from the week prior, but an increase nonetheless.
There’s also still a bit of demand left in the spot market, with two non-US utilities looking for more than 650,000 pounds U3O8 equivalent for spot delivery.
Last week in the term market was as busy as the entire month of April, with one deal concluded. TradeTech notes that AREVA has been awarded a contract by a US utility to supply around 1m pounds over several years. Yet despite the activity, there were no changes to the TradeTech’s term prices, with the Mid-Term U3O8Price Indicator staying out at US$44.00/lb and the Long-Term Indicator remaining at US$57.00/lb.
There are still a number of utilities sitting on the sidelines of the term market. TradeTech advises that there’s one non-US utility looking for around 2m pounds contained in UF6, or enriched uranium product for delivery between 2014 and 2020. This utility is currently looking at offers.
Another non-US utility is looking for 1m pounds for delivery over a five-years and one US utility is looking at offers for about 1.2m pounds. There is also one more non-US utility reviewing offers for 750,000 pounds for deliver y between 2014-2018, while one last utility is seeking offers for delivery beginning in 2017.
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