Commodities | Dec 11 2012
By Andrew Nelson
Just when we thought the uranium market was settling down for a quiet holiday season, we are greeted with a busy week of year-end buying and selling. Producers were probably not too bothered by the uptick in activity and prices, likely wishing every week was like the last one.
Industry consultant TradeTech reports there were eight deals concluded over the course of last week, seeing some 1.2m pounds of U308 equivalent change hands. The buyers were mostly traders and financial entities, although there were also some utilities in the market as well. The sellers, for the most part, were traders and financials, which seems to indicate the week was about adjusting year-end positions rather than direct purchases to fuel nuclear energy supply.
While last week started off with a few deals booked below the prevailing spot, as the week wore on the price of uranium quickly reversed after a number of buyers turned up to buy around 700,000 pounds at prices above the prevailing spot. TradeTech notes sellers were quick to react in lifting prices, but the move did little to slow the buying, with another 500,000 pounds heading out the door at increasingly higher prices.
After the dust had settled, TradeTech’s Weekly U3O8 Spot Price Indicator was up US$1.00 to US$43.50 per pound, making for the best week the market’s seen in quite a while. And there could be a bit more activity next week, with one non-US utility is looking for more than 1m pounds for delivery in 2013, with offers due no later than today.
There was also a bit of life in the term uranium market, with TradeTech reporting two sales over the course of last week. The deals, both with US utilities, were concluded at the current market price, meaning there was no change to prices.
The better news is that there is still quite a bit of speculative demand hanging around the term market. TradeTech reports there are a number of utilities looking for more than 8m pounds for delivery between 2015 and 2025, while a couple of non-US utilities continue to look for nearly 2m pounds, with one prospective buyer wanting 1m pounds for delivery over a five-year period and the other wanting 750,000 pounds for delivery between 2014-2018.
Despite the activity and increasing levels of demand, there was no change to TradeTech’s Mid-Term and Long-Term U3O8 Price Indicators, which both stayed put at US$47.00 and US$59.00 per pound respectively last week.
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