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Uranium Prices Creeping Higher

Commodities | Oct 05 2010

By Chris Shaw

Uranium prices posted a modest gain last week, industry analyst TradeTech lifting its spot price indicator for the week ending October 1 by US$0.75 to US$47.50. The increase reflects multiple producers entering the market actively seeking uranium for immediate delivery, which one assumes would be to make up contratc short-falls.

One utility also entered the market, seeking around 400,000 pounds of uranium for spot deliver and a further 650,000 pounds for delivery next year according to TradeTech. Elsewhere, the group notes two buyers are still evaluating offers for up to one million pounds of material.

In the term uranium market TradeTech notes there has been no new demand or transactions since the end of last month. One US utility is assessing offers for delivery of up to 2.2 million pounds of uranium between 2013-2019, while another US utility is evaluating offers for 520,000 pounds for delivery in 2011 and 2012 and up to 1.1 million pounds per year in 2015 and beyond.

There was one September transaction in the term uranium market, a utility selecting a preferred supplier for delivery of around two million pounds of material to be delivered across a six-year period.

TradeTech's new spot price indicator compared to a price of US$46.75 the previous week and is an increase of US$1.25 from the level at August 31. Prices were volatile through September as earlier in the month TradeTech's spot price had been as high as US$48.00 per pound.

For the month a total of 20 transactions were recorded for a total of 3.1 million pounds equivalent of uranium, while year-to-date volume now stands at 32.6 million pounds uranium equivalent.

Falling prices in recent months attracted new buyers into the market, though TradeTech notes the impact of this increased buying interest was offset by new supplies hitting the market.

Factoring in September's market activity sees no change to TradeTech's medium-term price indicator of US$50 per pound. The group has lifted its long-term price indicator to US$62 per pound from US$60 per pound previously. The increase to the long-term price indicator reflects both increasing demand for material and recent offers and transactions.

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