Commodities | Sep 02 2008
By Rudi Filapek-Vandyck
Spot uranium hasn’t moved since the end of July, so it is little surprise industry consultant TradeTech’s update for the month of August contains an average price for the past month of US$64.50 per pound.
It was not just the spot price that remained “flat” throughout August, TradeTech uses the same term to refer to overall demand in the spot market as well.
All in all, reports the industry consultant, a total of 1.6 million pounds U3O8 (uranium oxide) equivalent changed hands through the spot market via eight concluded transactions in August. This compares to a transaction volume in excess of 2.5 million pounds (15 transactions) for July.
The significant slow down in overall market activity comes despite industry leader Cameco announcing further remediation problems at its Cigar Lake project. TradeTech reports the ongoing Cigar Lake problems did have an effect in that it was used by potential sellers to push up asking prices. Also, TradeTech suggests, renewed focus on Cigar Lake did pull in some extra demand into the spot market, but as it all remained “discretionary” in nature, there was no measurable impact on the spot price.
TradeTech nevertheless believes the buyers in the market are warming towards higher pricing for yellow cake; both regarding spot price transactions as well as longer term supply deals. So far, the consultant’s long term price indicator has remained unchanged at US$80/lb.
