Commodities | Aug 04 2015
By Greg Peel
For three weeks in a row, industry consultant TradeTech’s weekly spot price indicator stalled at US$36.25/lb as buying interest failed to materialise. Sellers were hoping news that the first two Japanese reactors will be up and running shortly, and that India is stepping up its nuclear power capacity, would encourage buyers so they refused to lower prices.
Until last week. Uranium suppliers are facing near-term financial pressures at low spot prices and global supply remains in excess, thus last week saw the sellers finally capitulate out of necessity and subsequently TradeTech’s weekly spot price indicator plunged US$1.25 to US$35.00/lb.
The end of the week also saw the end of the month, and for the month of July TradeTech registered 19 transactions totalling, 2.3mlbs of U3O8 equivalent – a fifteen-month low.
There were five transactions reported in the term market throughout the month, totalling 15mlbs of U3O8 equivalent, but the bulk of that volume represents one particular delivery deal, being a commitment from Kazakhstan to deliver 5000t to India over a five-year period. There is nevertheless a lot more buying interest in the wings of the mid-term market at present than there is in the spot market, TradeTech notes.
Excess supply and access to low-cost financing is allowing some suppliers to offer low mid-term delivery prices and competition is intense, with both producers and intermediaries fighting for market share. As a result, TradeTech has also lowered its mid-term market price indicator by US$1.25 to US$38.25/lb.
TradeTech’s long-term price indicator falls US$1.00 to US$45.00/lb.
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