December 2, 2009

Uranium Spot Price Rises To US$45.50 P/Lb

Weekly Spot Ux U3O8 Price
as of November 30, 2009
Change from previous (week)

U3O8 Price $45.50 +2.50



Uranium Long Term Price

U3O8 Long Term Price



Uranium Mid Term Price

U3O8 Current Spot Price


Uranium Spot Price

U3O8 Current Spot Price



It wasn't until last week that the market got some much needed good news. A preliminary prospectus was filed in Canada for the formation of a uranium investment fund. Uranium Investment Corp is looking to raise as much as C$150 million to invest in uranium products. TradeTech reports that the company intends to use almost all of the money it raises to acquire uranium products.

The supply side saw a number of sellers hit the market ahead of the announcement from the DOE and this served to drive prices down during the first few weeks of the month. Buyers were quick to take advantage of the bargains on offer, with 14 transactions totalling 1.6 million pounds U3O8 equivalent concluded during the first three weeks of November.

However, there were another 8 transactions totalling over 1.1 million pounds U3O8 that were concluded in the last week of the month, despite it being a short week. These deals not only helped to clear the market of most of the discounted supply, buyers also seemed willing to pay more to secure material. TradeTech reports that by month-end, prices had increased US$1.25 from the November 27 Spot Price Indicator.

Fellow-consultant Ux Consulting reports that buying interest in the U3O8 spot market last week was widespread, with buyers including US and non-US utilities, traders, producers, and financial entities, which included both existing players as well as new entrants. This trend continued into this week, notes UxC, with buyers increasingly raising bids. This encouraged the now more discretionary sellers to raise their offers in turn.

All up, it is beginning to look like the aggressive sellers of the past few months are being replaced by increasingly aggressive buyers. Yet with the end of the year quickly nearing, it seems the sellers that had to sell have now pretty much shifted their goods. On the buy side, it's the new entrants in the market and the potential for more to follow that has extended increased interest.

Yet how much the spot price will rise is still a hard question to answer, as it depends both on the depth and aggressiveness of buyers and the price level that would make sellers happy enough to bring more supplies to the market.

The gap between the spot uranium price and the term price is also closing after longs months of an unmoved long-term price. Sellers in the term market have begun to lower prices in an effort to compete with various "buy and hold" options available to utility companies. This saw both mid- and long-term prices come under pressure during November.

TradeTech's Mid-Term U3O8 Price Indicator was down US$5.00 to US$50.00 per pound U3O8 over last month. The Long-Term Price Indicator for November 30 is US$60.00 per pound U3O8, which was also down US$5.00 from the October 31 level.

UxC's long term price indicator has now dropped to US$62/lb.

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