Commodities | May 31 2016
By Greg Peel
The buying interest from utilities for uranium in the spot and term markets had been quietly growing, at least up until last week. While utilities have begun to become more interested, as has long been anticipated, they are yet to exhibit any sense of urgency.
Which is why they were happy to stand aside last week as traders saw the calendar approaching June and decided not to be caught with material at books-close for the half year. Their own sense of urgency saw industry consultant TradeTech’s weekly spot price indicator drop by US$1.60 last week to US$27.25/lb.
TradeTech reported low volume nevertheless, with less than 600,000lbs changing hands. No transactions were reported in the term markets. TradeTech’s term price indicators remain unchanged at US$29.25/lb (mid) and US$42.00/lb (long).
One issue frustrating US uranium producers at present, and indeed global producers, is ongoing sales of excess uranium by the US government into a market already struggling with oversupply against current demand.
Last week seventeen members of US Congress from both houses and both parties petitioned the US Department of Energy to cease flooding the market by bartering excess inventories, significantly contributing to oversupply, hurting US uranium producers and forcing job losses in the industry.
The DoE has agreed in the past not to be too aggressive, but clearly the current uranium market is not one in which such ongoing sales can be easily absorbed.
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