Commodities | Aug 20 2013
By Greg Peel
It is not always easy to push a large order through an actively traded, exchange-listed market without having an influence on the price in that market. It is almost impossible in a non-exchange market which relies on asking for interest from the market itself. Two weeks ago an institutional buyer was contemplating the purchase of one million pounds of U3O8 at spot, presumably (but not necessarily) as a speculative trade, and hence disclosed its interest to the usual suspects. Word spread, and prospective sellers all backed off. The spot uranium price then bounced up as other buyers chased trades.
The irony is that not only did the price become too steep for the institution, its own share price fell as well. Hence, reports industry consultant TradeTech, no deal.
Once again the floor was pulled out from under the spot market, and prices have responded accordingly. Some 800,000lbs of U3O8 equivalent did change hands in several transactions over the course of last week, but prices trended lower with each trade now that the sellers are on the hop once more. TradeTech’s weekly spot price indicator has fallen US75c to US$35.00/lb.
These fluctuations in the spot price are having their effect on the term market. A number of utilities are looking to enter the term market for supply contracts, TradeTech reports, but none appears in a great hurry while price movements are unclear. No term transactions were reported last week.
TradeTech’s term price indicators remain unchanged at US$39/lb (mid) and US$54/lb (long).
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.
