Commodities | Feb 16 2016
By Greg Peel
For months now, sellers of uranium have been counting on a resurgence of demand in the mid-term delivery contract market given a long period of limited buying interest. While term demand has stepped up a little, utilities remain fairly well stocked and appear in no rush to pay up for material, particularly in the spot market.
Thus last week when a little more spot buying interest hit the market, sellers were quick to offload material. Spot volume increased to 1mlbs U3O8 equivalent in five transactions from 650,000lbs the week before, industry consultant TradeTech reports, but prices drifted lower as the week progressed.
TradeTech’s spot price indicator ended the week down US15c at US$34.00/lb.
Interest in the term market remains evident but not rushed. Two transactions were reported in the term markets last week but only to the tune of around 1mlbs. Meanwhile, two utilities are continuing to evaluate offers for delivery of almost 20mlbs in total across mid and longer term timeframes.
As to whether the settlement of these offers can prove market-moving is yet to be seen. Meanwhile, TradeTech’s term market price indicators remain unchanged at US$36.50/lb (mid) and US$44.00/lb (long).
There had been much anticipation, going back a couple of years now, that once Japan commenced restarting its idled reactors the spot uranium price would begin a resurgence. But given Japanese utilities did not rush to dump their stockpiles in the interim, no significant demand driver has emerged. A fourth Japanese reactor is set to restart at the end of this month, but there has been no resultant excitement in the market.
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