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Uranium Week: Lacking Buyers

Weekly Reports | Mar 19 2019

The spot uranium price continues to fall as US utilities remain out of the market.

-Uranium spot price down -6% in 2019
-US utilities staying away
-Spike in trading volume misleading, according to TradeTech

By Greg Peel

It was a busy week last week in the spot uranium market, with a sizeable volume of 2.6mlbs U3O8 equivalent changing hands. The volume is nevertheless misleading, industry consultant TradeTech reports.

The week featured a number of back-to-back deals tied to delivery location, timing and/or counterparty risk, such that several lots of material changed hands multiple times throughout the week.

For some months now, and as is often the case, spot prices have varied depending upon where the material is to be delivered to – US, Canada or Europe. This means a buyer can pay more in one location than a seller is prepared to sell at the other. Add in other vagaries of delivery timing and counterparty risk and what TradeTech comes up with is a weekly spot price “indicator”.

It’s not an exchange-traded market.

While utilities were involved to some extent on the buy-side last week, a majority of US utilities have withdrawn from the market as they await a section 232 decision from the Department of Commerce. The issue for uranium markets is they could be waiting for some time.

This lack of near term demand has led to a drift down in the spot uranium price in recent weeks. As we approach the end of the March quarter, sellers have become more keen to offload material. TradeTech’s spot price indicator fell -US$1.10 last week to US$27.00/lb.

The spot price is now down -6.1% in 2019 year to date but remains 24% higher year on year.

TradeTech’s term price indicators remain at US$30.00/lb (mid) and US$32.00/lb (long).

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