Uranium Week: Interest Quietly Building

This story features ENERGY RESOURCES OF AUSTRALIA LIMITED. For more info SHARE ANALYSIS: ERA

By Greg Peel

Last month’s news that Energy Resources of Australia ((ERA)) would not be proceeding with its planned Ranger 3 Deeps underground uranium mine, and the growing emergence of utility demand for uranium at attractive prices, conspired to provide a boost to interest in the uranium market in June. At month’s end, industry consultant TradeTech’s spot price indicator had risen US$1.25 from end-May to US$36.25/lb, having traded as high as US$36.75/lb mid-month.

As at Friday, TradeTech’s weekly spot price indicator was unchanged at US$36.25/lb, down US25c from the week before.

June saw 24 spot market transactions for a total of 3.8mlbs of U3O8 equivalent, TradeTech reports, up almost 900,000lbs from May. Three utilities seeking 640,000lbs U3O8 for delivery later this year found suppliers, while another utility is currently looking for 54,000lbs for November delivery.

Six transactions totalling 3.6mlbs of U3O8 equivalent were reported in the term uranium markets last month. Lower prices in the mid-term market has encouraged utilities to enter on the buy-side, TradeTech notes, and a US utility appeared late in the month seeking 100,000-300,000lbs for delivery over 2018-25. A non-US utility is seeking around 9mlbs for 2017-26 delivery.

Sellers have become more aggressive in the mid-term market, the consultant reports, while not being as keen to deal in the long-term market, except at higher prices. TradeTech’s long term price indicator remains at US$46.00lb, but due to building demand, TradeTech has raised its mid-term price indicator by US50c to US$39.50/lb.
 

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