Commodities | Jul 01 2014
By Greg Peel
The good news is industry consultant TradeTech’s uranium spot price indicator rose last week. The bad news is it was only by US10c, to US$28.20/lb, and was more representative of a lack of seller aggression than it was of buyer excitement. At least we can say, perhaps, that the level of seller urgency seen over past months, which has affected a fall in the spot price to below US$30, has eased off.
But TradeTech notes spot uranium demand remains weak, with very few buyers expected to enter the market in coming weeks. Last week saw only four transactions conducted totalling less than 700,000lbs of U3O8 equivalent.
While the restart of Japanese reactors remains as the swing factor in the global uranium market, analysts have suggested for some time that utilities around the globe would eventually have to start buying in new material. End-user buying all but dried up as prices continued to plunge post-Fukushima given utilities were happy to ride out the volatility on abundant stockpiles. The question is as to how much material they still have to tide them over.
Current prices would suggest plenty to date, but at least there is some interest returning to the term market, if not the spot market. One US utility has completed evaluation offers for up to 2.5mlbs of U3O8 to be delivered over two periods, beginning in 2016 and extending to 2020, while a non-US utility is finalising evaluation of offers for in excess of 7mlbs to be delivered over multiple periods in 2016-25, TradeTech reports.
It’s not enough to move the dial, but it’s something. TradeTech’s term price indicators remain unchanged at US$31/lb (mid) and US$45/lb (long).
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