Commodities | Nov 02 2010
By Chris Shaw
Following a big jump the previous week spot uranium prices have settled down, industry consultant TradeTech's weekly Spot Price Indicator falling by US$0.50 to US$52.00 per pound over the past week.
According to TradeTech, the US$4.00 per pound jump the previous week saw a number of buyers step back from the market, a move that forced sellers to lower their offer prices to get deals done. Over the week there were eight transactions concluded, totalling 1.4 million pounds of material in the spot market.
Buyers included non-US utilities, producers and traders, with TradeTech noting transaction prices varied depending on delivery location. As an example, transactions involving delivery at the Comurhex facility in France closed as much as US$0.75 per pound higher than transactions for North American delivery.
TradeTech notes offers were due this week to one US utility seeking about 180,000 pounds of uranium, while another utility was evaluating offers for 400,000 pounds for spot delivery and a further 650,000 pounds for delivery next year.
While the spot market remains active, TradeTech notes there were no transactions or new demand in either the uranium term market or the conversion market. US utilities remain active in the term market, one seeking just over 500,000 pounds for delivery over a 5-6 yer period and another evaluating offers for 2.2 million pounds of uranium for delivery between 2013 and 2019.
TradeTech's Long-Term Price Indicator has remained untouched at US$62.00 per pound, but the consultant's mid-term price indicator made a big jump to US$56/lb from US$50.
In monthly terms the increased activity is boosting prices, as TradeTech's Exchange Value for October rose by US$5.25 from end of September levels to US$52.00 per pound. This is the largest monthly increase since November of 2008. Transaction Value also increased for the month, rising to US$47.40 per pound from US$45.35 the previous month.
While additional material became available from producers, traders and the US government TradeTech notes this was offset by the entrance of significant utility demand across the spot, mid and long-term sectors of the market. The industry consultant notes total year-to-date volume stands at 37.4 million pounds of uranium, well up from the 28.3 million pounds recorded for the same period last year.
