Published on Wednesday January 30 2013 (AEST)
Uranium price publishers TradeTech and Ux Consulting increased their weekly spot prices for uranium to $43.75/pound U3O8 and $44/lb, respectively, due primarily to purchases last week by Deutsche Bank, market sources said. TradeTech's price Friday was up $1.25 from its previous weekly price, and UxC's price Monday was up by $1.50. Analysts said Tuesday they expect U3O8 spot prices to soften during the next few days, noting that prices have retreated since Friday when there were several transactions at above $44/lb.
Buyers "backed away from the market" late in the day, UxC said. This followed offers Friday by Goldman Sachs to sell U3O8, a source said. Deutsche Bank's purchases got the attention of uranium market participants because of the perception that the bank "looks at uranium as a long-term play," one source said. "When people see "Deutsche Bank is buying material..., this sends a signal that [the bank] feels in the longer term the price of this commodity will go up," the source said.
Overall, there were nine transactions totaling nearly 1 million lb U3O8 last week, TradeTech reported and 10 transactions totaling about 1.1 million lb, UxC reported. Deutsche Bank's purchases last week were 300,000 to 500,000 lbs. U3O8, a source said. Both of the uranium reporting services said prices were buoyed by buyers reacting to reports of political unrest in the West African nation of Mali, raising security concerns about uranium production in nearby Niger--the world's fourth-largest producer.
"[S]uppliers have been reticent to sell, creating a situation where the market has traded up as material was being placed in the market at successively higher prices," UxC said. In addition, TradeTech said "others believe buyers are acquiring material in order to cover previous delivery commitment or in anticipation of upcoming mid-term opportunities." It said that a non-US utility, which it did not identify, "is seeking approximately 2.2 million pounds U3O8 equivalent for delivery between 2014 and 2020." The Platts NuclearFuel range for the week is $42.50-$46/lb.