Uranium Rises for Third Week as Hedge Funds Return to Market
By Christopher Donville
Oct. 27 (Bloomberg) -- Uranium rose for a third consecutive week as speculators rekindled their interest in the raw material in nuclear reactor fuel, said TradeTech LLC, a publisher of price assessments.
The metallic element for immediate delivery rose $4, or 5 percent, to $84 a pound, Denver-based TradeTech said yesterday in a weekly report. The equivalent of at least 350,000 pounds were sold in two transactions, the company said.
``Renewed buying interest on the part of speculators and hedge funds is contributing to the upward price pressure,'' TradeTech said. ``However, this demand remains predominantly discretionary.''
Purchases by hedge funds and other non-consumers of uranium helped lift the spot price to a record $138 a pound in June, according to TradeTech's assessments. The price fell as low as $75 by the end of September as speculators sold to generate cash and some nuclear power operators temporarily withdrew from the market.
``I think we'll have a continuing strong market, but a more rational market,'' E. Peter Farmer, president of Toronto-based Uranium Participation Corp., a speculative buyer of uranium, said yesterday in an interview.
On Sept. 28, Uranium Participation bought 217,230 kilograms of uranium hexafluoride, of UF6, at the equivalent uranium price of about $75 a pound, the company said in a statement on Oct. 3.
``We thought $75 represented the current floor price,'' said Farmer, who said he expects the volume-weighted spot price of uranium to average $90 to $110 a pound in 2008.
Cameco Corp., the world's largest supplier of uranium, rose C$1.65, or 3.5 percent, to C$48.70, yesterday on the Toronto Stock Exchange. The shares have risen 3.2 percent this year.
To contact the reporter on this story: Christopher Donville in Vancouver at [email protected]
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