if the ultility wants delivery of Uranium I suggest they better buy of the spot or lock into a longer term contract. Otherwise the ultility might have have make steam utilising all those nymex paper contractors.
Blatantly wrong.
"The decline means utilities buying the metal for a year ahead will pay $10 a pound less on Nymex than from producers using the industry's so-called benchmark long-term price, which was set at $95 by industry consulting companies Ux Consulting Co and TradeTech LLC"
Uranium Futures May Fall for 6th Week as Investors Deterred
By Yuriy Humber
Aug. 20 (Bloomberg) -- Uranium futures may fall for a sixth consecutive week after a credit crunch led to a rout in global stock markets and deterred commodity investors.
The metal for delivery in January dropped $29, or 29 percent, to $70 a pound last week on the New York Mercantile Exchange. The September 2008 futures contract dropped to $85, from $111.
The decline means utilities buying the metal for a year ahead will pay $10 a pound less on Nymex than from producers using the industry's so-called benchmark long-term price, which was set at $95 by industry consulting companies Ux Consulting Co and TradeTech LLC. The long-term price is used by utilities to secure volumes of uranium for as many as 10 years.
``The market's extremely thin at the moment, also partly due to the credit issues,'' said Warwick Grigor, a portfolio manager with Far East Capital Ltd. in Sydney.
The January contract recorded eight trades last week, while the February contract had three trades.
Metal for immediate delivery climbed to a record $138 in June. Uranium futures rose as high as $154 that month. The contracts began trading on Nymex in May.
``I welcome the correction, as the futures market is going through a maturation phase,'' Grigor said. ``It needs two-way trading to be effective.''
A build-up in inventories by power utilities, the biggest buyers of uranium, and an increase in availability for immediate delivery has depressed prices in the past two months. The so- called spot price has dropped 24 percent since June, and was unchanged at $105 a pound last week, according to TradeTech's weekly report published Aug. 17.
To contact the reporter on this story: Yuriy Humber in Moscow at [email protected]
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