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Uranium Week: Twelve-Year Low

Commodities | Oct 25 2016

The second weekly drop in 2016 in excess of 10% has spot uranium trading at its lowest level since 2004.

By Greg Peel

Uranium market participants were attending the annual International Uranium Fuel Seminar in Florida last week but unfortunately we cannot blame thin trade for another big plunge in the uranium spot price. Industry consultant TradeTech reports eight spot transactions totalling 1.2mlbs U3O8 equivalent.

That’s a heavy level of volume in 2016 terms. Sellers in the spot market believe there are buyers out there at lower levels and have been hoping to flush out utility interest by lowering prices. They may have found some buying interest last week but they are not preventing the spot price from falling ever further.

TradeTech’s weekly spot price indicator has fallen US$2.25, or 10.5% to US$20.00/lb, the lowest level since October 2004.

At the beginning of 2016, the uranium spot price stood at US$34.20/lb. It has now fallen 41.5% in almost ten months and is 70.5% lower than when a tsunami hit Fukushima in March 2011.

Sellers are still hanging on to the belief utility demand will pick up by year-end but on last week’s price movement, one would have to suggest their faith is being questioned. It is assumed growing interest in uranium spot term markets will translate through to better spot prices but quite clearly that’s just not happening yet.

There were no transactions reported in the term markets last week. TradeTech’s term price indicators remain at US$23.70/lb (mid) and US$37.00/lb (long).

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