By Andrew Nelson

The appreciation of uranium accelerated last week, with industry consultant TradeTech's Weekly U3O8 Spot Price advancing another US$2.50/lb to US$50/lb, after the previous week's US$2.00/lb rise.

Buyers and sellers alike were focused on news that BHP Billiton (BHP) had confirmed to several customers it had declared force majeure on deliveries from its temporarily troubled Olympic Dam mine.

The force majeure was due to a severe mechanical failure to the main haulage system at Olympic Dam that occurred on October 6.

The world's largest miner noted that uranium production for the next six-months would be affected by the issue, with output expected to be running at only 25% of capacity until full production resumes in the third quarter of the 2010 financial year.

The news has given sellers a much needed excuse to raise offer prices, with the three transactions reported last week concluded at significantly higher prices than those concluded the week prior, notes TradeTech.

The consultant points out current buying interest is coming primarily from traders and financial entities. As few utility purchasers are under pressure to purchase, they tend to be taking a "wait and see" approach, reports TradeTech.

Over the course of last week, TradeTech notes there was only one US utility evaluating offers in the spot market. Otherwise, there was no new demand in either the spot, or term markets. The lack of activity on the term market has seen the U3O8 Long-Term Price Indicator stay put once again at US$65.00/lb.

There was also no activity reported in the conversion market.

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