Uranium Weekly Price Uncertainty Dominates Event The uranium spot price remained at $90/lb for Ux and dropped $10/lb to $85/lb for Tradetech. The LT price remained $95/lb for both groups. Ux Feature Summary Ux consulting has published the results of its Summer Uranium survey: • Spot Price Expectations for 2007: Ux survey respondents indicated that the majority of market participants expect year end prices to be from $90-$100/lb. Those expecting weakness cited hedge fund selling as the dominant factor, while those expecting stronger prices highlighted the return of demand expected in the fall/winter and the exiting of aggressive sellers. • Has Uranium Price Peaked? More than 65% of respondents indicated that they believe prices have peaked. Those more bullish expect prices to peak in 2008 or 2009 with a forecast peak price of $150-$160/lb. • Summary: Overall, based on the results of the survey, very few respondents believed that the uranium market is either liquid or transparent and there is support for development of a physical exchange for uranium. Market News • A total of eight deals were reported in August bringing annual spot volume to 12.2 million pounds in 56 transactions. • The UF6 auctioned by the DOE in August was sold for an average price of $80/lb U3O8e, though this should have limited influence on the spot price given the auction has passed and deals have been done at higher levels since that time. • Three term deals were awarded last month bringing annual volume to over 132 million pounds. Active demand as per Ux now totals 24 million pounds. RBC Comments • The spot price, as quoted by Ux, continues to drift sideways with little spot volume being booked. We expect spot activity will pick up later this month and into October. However, the overhang of supply will likely fill near-term demand and the price may only firm slightly - but we don't expect significant weakening if all else remains equal. • The WNA numbers should be out in the next day or two and we continue to expect some market observers will be surprised by the lower forecast demand. • We continue to believe the spot market will be range bound between $85/lb and $100/lb in the coming weeks with increasing activity in late-September to early-October.
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