Commodities | Apr 12 2011
– Spot U3O8 market goes quiet with few utilities buying only
– It would appear a return to prices pre-Japan crisis remains unlikely for foreseeable future
By Greg Peel
One assumes that the tone at last week's World Nuclear Fuel Cycle conference in Chicago would have been somewhat more sombre than if it had been held before a tsunami irrevocably damaged the Fukushima nuclear plant in Japan and threw the uranium market into turmoil. At least for attendees it provided the opportunity to step away from trading desks for a while and to “examine and evaluate the lessons learned,” as industry consultant TradeTech puts it.
An absence of players in the market and no doubt some breath-drawing in the wake of past frantic weeks saw the spot uranium market go quiet last week. Trade Tech reports only two transactions totalling 200,000 lbs of U3O8. That's down from 900,000 lbs the week before.
Utilities were the buyers in both cases and by week's-end two new sellers had moved in to request bids, but TradeTech notes buying at present is highly discretionary and price sensitive. Trade Tech's weekly spot price indicator has fallen US75c to US$57.75/lb.
There was some suggestion that with uranium prices having fallen sharply post-quake and buyers feeling wary, the US Department of Energy might hold off on its scheduled stockpile selling this quarter. However the DoE has confirmed its sales will go ahead as previously intended.
Market participants feel that uranium prices will thus struggle to make it back to pre-quake levels in the nearer term, Trade Tech reports.
Mid and long term indicative prices remained last week at US$62/lb and US$68/lb respectively.
