Uranium Week: Drifting Away

Weekly Reports | Jul 07 2020

Uranium prices continue to drift lower on lack of utility interest while the virus continues to add extra uncertainty

-Kazakhstan moves to re-close
-Uranium market volumes falling
-Paladin has a plan

By Greg Peel

As the virus continues to wreak havoc or reaccelerates in many countries, leaders are choosing to reinstate preventative measures in order to control the spread. Witness a move in many US states to pause re-openings or enforce re-closures, as well as the state of New South Wales in Australia deciding to close its border with Victoria for the first time in the pandemic.

Virus concerns have led to the shutdown of uranium production in the likes of Canada and Kazakhstan, and last week the president of Kazakhstan instructed the government to consider re-imposing a strict quarantine.

While this will have the ongoing effect of constraining uranium supply, there is no suggestion in the uranium spot market this should by default lead to higher prices. On the contrary.

Average transaction volumes declined in the month of June following high levels of activity witnessed in March and April. Industry consultant TradeTech reports 41 transactions totalling 5.2mlbs U3O8 equivalent in the month. While transaction numbers remain above average, volumes in June were lower than average.

The close of the June quarter saw sellers anxious to offload material and demand appeared at lower prices, TradeTech reports, although utilities remained absent as producers, traders and speculators dominated the buying. TradeTech’s weekly spot price indicator fell -US20c to US$33.00/lb in the week ending July 4.

This was also the closing price on June 30, down -US85c from the May close.

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