article 3 months old

Uranium Week: Price Support Found

Weekly Reports | Apr 09 2019

While utilities still await the outcome of the section 232 decision, it appears prices below US$25/lb are too tempting to ignore.

-Sub-25 prices bring out buyers
-Spot price slide halted
-One week before section 232 decision

By Greg Peel

The spot uranium price had been on the slide for nine straight weeks and the last two weeks of that period saw price declines accelerating. Utilities had put purchases on hold ahead of the US section 232 decision due April 14 and sellers had become increasingly anxious, chasing bids down to a a low of US$24.90/lb a week prior.

But just when it looked like the spot price was in an unstoppable downward spiral, suddenly utilities sprung into action last week. The US$25/lb price level appears to be the line in the sand.

Industry consultant TradeTech’s weekly spot price indicator rose US85c over the week to finish at US$25.75/lb. It was the first weekly price rise since January. The spot price remains down -10% in 2019 but still up 28% year on year.

Volume Boost

While the March quarter featured a steady price decline, it also featured historically high transaction volumes. The total of 14.2mlbs U3O8 equivalent changing hands represents a 58% increase on the average of March quarter volumes from 2007 to 2018, and a 15% increase on the previous March quarter.

Total volumes in 2018 were 64% higher than the average of the 2007-2018 period.

No transactions were reported in uranium term markets last week but new demand is emerging, with utilities putting delivery requests out to tender.

TradeTech’s term price indicators remain at US$28.00/lb (mid) and US$32.00/lb (long).

Next week is the last week of trading before the US Department of Commerce is due to announce its decision as to whether section 232 need be invoked as a matter of “national security”, which would then force US utilities into a mandatory ratio of uranium purchase from US producers. The decision is due on the 14th, which is a Sunday, which seems a bit strange.

But either way, the DoC’s decision is not final. The president then has months to ponder the department’s recommendation.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

FNArena is proud about its track record and past achievements: Ten Years On

Share on FacebookTweet about this on TwitterShare on LinkedIn

Click to view our Glossary of Financial Terms