Uranium Spot Market Trading Volume Hits Record High

Published on Monday December 13 2010

The volume of uranium sold in the spot market, used by utilities to have material delivered within a year and by investors to speculate on the price of the fuel, hit a record this year on Asian demand.

Some 41.6 million pounds of uranium-oxide concentrate was sold in the market for the week ending Dec. 10, breaking a previous 1990 record of 40.6 million pounds, Denver-based pricing service TradeTech LLC said in a Dec. 10 report. The spot price rose 25 cents to $60.50 and new demand has emerged from a non-U.S. utility, TradeTech said.

Uranium, processed into fuel for nuclear plants, rebounded to the highest in more than two years as Asian utilities secure material for the next decade and China builds stockpiles, according to Macquarie Bank Ltd. Asia may operate 300 nuclear power reactors by 2030, up from 115 units today, inspection and certification agency Lloyd’s Register Group said last week.

“Currently, spot supply is extremely thin with most sellers now holding firmly to their offer prices and looking ahead to rising demand during the first quarter of 2011,” TradeTech said.

This year’s record volumes in the spot market represent the third straight year of growth. About 10 million pounds of uranium were sold in spot transactions in 2007, the lowest in at least 12 years, according to TradeTech data. One million pounds of uranium equal about 385 tons of the radioactive material.

China Guangdong Nuclear Power Co. last month agreed on long-term supply with Kazatomprom and Cameco Corp., the two largest uranium mining companies. China’s imports this year equal about 20 percent to 25 percent of global consumption, according to Macquarie Bank.

Chinese purchases from Kazakhstan, the world’s biggest supplier of the material, Uzbekistan, and Namibia have taken more than 6 million pounds out of the spot market, Macquarie Bank analyst Max Layton said Nov. 29.

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