Uranium Week: Slow Process

Weekly Reports | Jul 04 2017

The spot uranium price pushed higher last week before falling back again, to be only marginally stronger on the week.
 

By Greg Peel

Having spent most of the month of June trading under US$20/lb, two weeks ago the uranium spot price finally managed to crack that barrier and end the week slightly above, at US$20.15/lb. Last week saw the daily price rise as high as US$20.50/lb during the week.

But by week’s end, the sellers were winning again and industry consultant TradeTech’s weekly spot price indicator slipped back to US$20.20/lb, to be up a mere US5c for the week.

It looks like a case of two steps forward, one step back, but we might note that given Friday was also the end of the quarter and end of the half, there might have been some squaring up.

The average traded price for the half to June was US$22.69/lb, down -14% from the 2016 average of US$26.32/lb. At US$20.20/lb, the spot price is currently down -24% from the 2017 high of US$26.50/lb reached in February.

A total of 4.1mlbs U3O8 equivalent changed hands in the spot market in June in thirty transactions. While utilities were involved in purchases to some extent, the bulk of the buying came from traders.

June saw the spot price rise US25c above the May closing price of US$19.95/lb.

Perhaps the best news comes from the term markets.

2017 was another year which began with the expectation that utilities will shortly need to start stocking up on material, and that low prices would provide the incentive. Such demand would push up contract prices and this would spill over into stronger spot prices. But alas, 2017 has been another year, to date, in which such confidence has proven optimistic.

Utilities have indeed been active in terms markets, certainly more so than the stock market, but not enough to move the dial. TradeTech’s term price indicators have actually been slipping quietly into the sunset over the course of the year. But last week came a breakthrough, perhaps.

TradeTech’s long term price indicator remains unchanged at US$34.00/lb, but the consultant’s mid term price indicator has risen US20c to US$24.45/lb. Not quite a reason to break out the champagne, but perhaps a welcome change in trend, nonetheless.
 

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