September 9, 2010

Uranium Spot Price Rebounds To $48.00P/Lb

The spot market price of uranium continued to soar over the past week to now stand at around $48 a pound U3O8, about $2.50/lb more than August 31.

U3O8 Pricing

UX U3O8 Spot :: US$48.00/lb

UX U3O8 Long Term :: US$58.00

Greater than expected demand by non end users and relatively few current sellers continue to put upward pressure on the price, several analysts said. The price may break through $50/lb sooner than many had predicted, one analyst said, adding that he expected end-user demand to pick up in the fourth quarter as utilities move to fill any remaining uranium requirements they may have in 2011.

But whether the spot price rises much above $50/lb is uncertain, said another analyst, given that more sellers likely will appear after the spot price hits $50/lb. Another market source said he still believed the current price increase was fragile. He noted that all it took was one aggressive seller in the last full week of August to push the price from above $46/lb to below $44/lb.

The rapid spot price rise was reflected in prices that TradeTech and Ux Consulting published. TradeTech raised its spot price Friday to $46.75/lb, up $1.25/lb from its August 31 price, while Ux raised its price Tuesday to $48/lb, up $3/lb from its August 30 price.

TradeTech reported that over the past week about 1.2 million lb U3O8-equivalent traded in eight transactions, with producers and intermediaries the buyers in most of the deals. TradeTech noted that with more than 30 million lb sold in the spot market in 2010, many sellers have met their sales goals for the year and spot supply available for immediate delivery is relatively thin. Back in the market, according to several sources, is Argentina's Combustibles Nucleares Argentinos S.A., which is said to be looking to buy about 520,000 lb U3O8e for 2011 delivery.

Ux's broker average price was $47.08/lb a pound U3O8 Tuesday, up from the $45.85/lb BAP August 31. The BAP is a daily calculated midpoint of the bids and offers that ICAP, Evolution Markets and MF Global report, Ux said. In the long-term market, both Ux and TradeTech kept long-term prices for the end of August at $60/lb.

TradeTech's monthly mid-term price remained at $50/lb at the end of August. One analyst said downward pressure on the mid-term price has clearly been removed by the latest spot price surge. The Platts NuclearFuel range for the week was $44.50/lb to $47.50/lb.

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