January 21, 2011-The spot uranium price continued its upward climb this week increasing $2.50 to $69.00 per pound U3O8, the highest level reported since April 2008. While some buyers have retreated in the wake of the price rise, others have been willing to pay higher prices in order to secure material. A total of over 800 thousand pounds U3O8 equivalent changed hands over the course of the week, with the bulk of the volume purchased today at prices at, or very near, TradeTechs Uranium Spot Price Indicator. Buyers included utilities, traders and financial entities. New demand emerged this week with a non-US utility seeking offers for a total of 400 thousand pounds U3O8 to be delivered in two lots by July 2011.
Spot uranium supply remains thin and sellers are convinced of further price increases. Consequently, those suppliers holding material are increasing the level of their offer prices with each consecutive transaction. The price rise has been spurred by reports of missed production targets from several producers. The most recent producer to report a projected production shortfall is Paladin Energy, which announced on January 20, that its 2011 production target was downgraded 14 percent due to delays at its Kayelekera project in Malawi.
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