Commodities | Jun 30 2009
By Chris Shaw
After ending May at US$49 per pound, uranium prices enjoyed a strong start to June as prices rose to US$55 per pound last week, industry analyst TradeTech noting the gains were enough to bring new supply to the market. At the same time buyers backed away in response to the higher prices, causing a widening of the gap between buyers and sellers.
According to the industry consultant’s latest “Nuclear Market Review,” active demand for uranium now stands at around two million pounds, a fall of 800 thousand pounds given the pullback in buyer interest. The result has been a drop in price in recent sessions, the spot price now standing at US$52 per pound.
While the spot market slowed fellow consultant Ux Consulting notes a further seven deals were completed, bringing the monthly total to 24 spot deals for the equivalent of five million pounds of material. Year to date totals continue to suggest 2009 will be an active year as indicative annual volume of 28.4 million pounds would be among the highest since 1996.
On Ux Consulting’s numbers, the spot price fell US$2 per pound over the week to US$52, partially reflecting buyers caution leading into the traditionally weaker seasonal demand period of the next couple of months.
In the longer-term market, UxC notes while there were no transactions there are offers being considered to supply a US utility with around 18 million pounds of uranium between 2012 and 2025 and a non-US utility with five million pounds between 2010 and 2016.
Both the conversion and enrichment markets have been quiet in recent days given no transactions or reports of new demand, so given the lack of activity in the long-term market TradeTech’s long-term price indicator is currently unchanged at US$65 per pound.
Ux Consulting notes the spot price increases of recent weeks has caused similar gains in longer-term contract offers, with the upper end of offer prices now above US$70 per pound. But with at least a couple of sellers offering material at prices below this level there has been no change to its matching long-term price estimate of US$65 per pound.
