Uranium Market Slumbers

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By Greg Peel

It’s not what struggling uranium producers want to hear. The spot market has gone dead quiet. While this implies no great urgency for holders of material to offload, it also indicates no increase in interest from uranium consumers at these low price levels. Indeed, industry consultant TradeTech’s spot price indicator has remained unchanged since October 4 at US$35.25/lb. Price recoveries are usually preceded by a final capitulation sell-off. In other words, price volatility.

TradeTech reports only two transactions in the spot market last week, totalling 200,000lbs of U3O8. There were no transactions in the term markets, and TradeTech’s term price indicators remain unchanged at US$38/lb (mid) and US$51/lb (long).

Interestingly, yesterday Japan posted its fifteenth successive monthly trade deficit, a run not seen since 1979. As a major exporter, Japan should be posting surpluses. Japan did see some improvement in exports during the month, particularly to China, but on the other side of the ledger the levels of fossil fuel energy the country has been forced to import is ensuring ongoing deficits. Yet still there is little word from the Japanese government regarding policy on the restart of the country’s nuclear reactors.

Japanese reactor restarts remain the swing factor for the global uranium industry.

There was positive news out of the UK during the week, TradeTech reports, with the UK apparently set to move ahead on two new reactors at the Hinkley Point site. Meanwhile, Canadian uranium companies have been in the spotlight, with Uranium One’s major shareholder, Russian state-owned Atomredmetzoloto (trying saying that quickly), moving to buy out the company and take it private, and Australia’s Toro Energy ((TOE)) moving forward with its acquisition of the Lake Maitland project in WA from Mega Uranium.

Low uranium prices are offering up industry consolidation.
 

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