Commodities | Apr 07 2015
By Greg Peel
Spot uranium volumes traded in the month of March reached 7.8mbls of U3O8 equivalent, industry consultant TradeTech reports, up from 3.0mlbs in February. Volumes for the March quarter reached 15.2mlbs compared to 9.0mlbs in the March quarter last year.
Aside from official volume increases there has also been an increase in off-market spot transactions directly between interested parties.
The increase in volumes is largely due to several transactions being recorded for significantly larger quantities than is typical for spot market transactions, TradeTech notes. Large volumes are usually reserved for term delivery contracts, leaving the spot market to cover shortfalls around the edges and to facilitate speculation.
While spot prices trended quietly upward in the month of March, larger volume parcels on offer created some downward pressure. But they also sparked interest from utilities, who have been mostly sitting on the sidelines in the post-Fukushima years. TradeTech’s spot price indicator closed at US$39.40/lb for the month, up US90c from end-February. In the first couple of days of April, pre-Easter, the price has ticked down US10c to US$39.30 for week’s end.
The uranium market has been expecting utility interest to return for several months now but it has proven a slow process. Only two transactions involving less than one million pounds each were concluded in the term markets in March but two US utilities did enter the market looking for mid and long term contracts, and more are expected to follow.
Interest is more active in the mid-term market, TradeTech notes, where sellers are more willing to compete on offer prices. They are less willing to reduce longer term prices, hence a price gap persists. TradeTech has raised its mid-term price indicator by US1.00 to US$43.50/lb at month’s end while leaving its long-term indicator unchanged at US$50.00/lb.
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