Commodities | Aug 14 2007
By Rudi Filapek-Vandyck
One transaction by Tullett Prebon Plc, the world’s second-largest inter-dealer broker and a dealer in uranium futures contracts, in the past week proved sufficient to bring two uranium industry consultants back in line with their respective weekly U3O8 price indicators.
After TradeTech clocked off on US$105/lb (minus US$15 from the previous week) earlier this week, colleague/competitor Ux Consulting has followed suit with a similar US$105/lb for the week, down from the US$110/lb price set last week.
Apparently, Tullett Prebon sold 50,000 pounds of the metal at US$105/lb during the week.
Interestingly, Ux Consulting notes it has reduced its forecast global production volume for this year by 5 million pounds to 112 million pounds. The consultancy finds it “disconcerting that production plans continue to disappoint at current price levels”.
The long time price indicator has remained unchanged at US$95/lb.
Ux Consulting further comments the market for uranium appears to have become even more illiquid than in the first half of 2007 when prices continued to move up strongly. Those were the days buyers found it very difficult to get what they were after. These days, however, the sellers are finding it increasingly difficult “to liquidate any sizeable amount of their material”. It is not difficult to see why prices are tumbling lower.
UxC is offering little comfort to the remaining speculators in the sector as the sharp drop in spot prices doesn’t seem to attract any buyers. This, the consultancy believes, may indicate potential buyers are expecting prices to fall further still.
