Commodities | Sep 14 2010
By Rudi Filapek-Vandyck
Some market commentators prefer to talk about a “fragile”, yet “hopeful” uptrend in spot uranium prices throughout August and into September, but the more positively minded are already assuming post US$50/lb pricing, potentially as early as next week.
Fact is industry consultant Ux Consulting raised its weekly spot price indicator for U3O8 to US$48/lb last week (up US$3) and fellow-consultant TradeTech matched the price level for the week ending on Friday. TradeTech's lift to US$48/lb implies a gain of US$1.25 on the previous week's price setting.
TradeTech's market update also mentions a considerable slowing in overall spot market activity as buyers seemed prepared to fork out higher prices to obtain more yellow cake, but these buyers were confronted by a seemingly market shortage in sellers.
Overall volume transacted in the spot market fell to a mere 300,000 pounds of U3O8 equivalent last week, on estimates by TradeTech, compared with total volume in excess of 1.2m in the first three days of September.
Note that both consultants left their longer term price benchmarks unchanged at US$60/lb. Some market insiders believed some market pressure had been building on medium term contact prices, but recent strong prices on the spot market seem to have averted any prospects for lower pricing in the term market.
TradeTech also has a medium term price benchmark and this measure equally remained unchanged at US$50/lb.
