Spot uranium prices continue to slowly rise, despite few deals
Washington (Platts)--23Nov2010/413 pm EST/2113 GMT
Although there were few transactions over the past week in the spot uranium market, the spot price continued to rise, although at a slower pace than in early November.
TradeTech raised its spot price indicator to $59.90 a pound U3O8 on Friday, up 65 cents/lb from its November 12 price. Ux Consulting on Monday raised its spot price indicator to $60.50/lb, up $1/lb from Ux's price on November 15.
TradeTech said spot supplies are extremely thin, with few sellers willing to extend offers at fixed prices, particularly for delivery beyond the end of the year. TradeTech said it appeared only about 200,000 lbs U3O8 were traded over the week that ended November 19, compared with about 900,000 lbs traded the week prior.
Ux observed that the market appears to be taking a pause, but added it was unclear how long that pause might last, given the start of the holiday season. If buyers retreat, "we could be in for several quiet weeks with respect to spot volumes," Ux said.
Ux also noted that offers for delivery next year have flattened out, and there is a narrower price differential between December 2010 and December 2011 delivery based on recent offers.
One analyst said utilities were unlikely to step into buying right now, given the rapid escalation of the price to above the $60/lb currently from around $47/lb at the end of September, but they will return to the market if the spot price stays around $60/lb for a number of months, he added.
A question for 2011 is whether entities based in China will continue to buy a lot of material in the spot market -- as much as 15 million lb in 2009 and 10 million lb so far this year, the analyst said. Without such buying, the spot price might be $10/lb lower than it is currently, he said.
Ux's broker average price -- a daily calculated midpoint of the bids and offers reported by ICAP Energy, Evolution Markets and MF Global -- was $60.13/lb U3O8 Monday, up $1.11 cents/lb from the $59.02/lb BAP November 15. The Platts NuclearFuel range for this week was $58.50-$63/lb U3O8.
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