Justin Garrow in the conference call spoke about the reasons for...

Justin Garrow in the conference call spoke about the reasons for the spot price falls. Here are my notes, there are some interesting and new points (for me)

Firstly everyone seems fixated on the spot market, and so this is where the focus is. Yet the spot market has a normal annual volume of 50m lb against a total demand of 170-180m lb. This year it has been less 40m lb

The utilities make up less than 50% of the spot volume ie less than 20m lb of the 180m required by end consumers was sold on the spot market

Traders and financial entities are greater than 40% of the spot market

No evidence of japanese liquidation of inventory.

The term market will pick up in the new year once utilities receive their spot purchasing budgets.


This market is reminding me of the gold market many years ago. Thinly traded and manipulated by traders. Traders have taken a position to short the market and are waiting for a trigger before closing out positions. A dangerous game when you consider the real shortage that is coming.

It is expected that 60-70% of the japanese reactor capacity will be back once the safety guidelines are finalised. This is expected in 2013-2014

Right now the market is factoring in no more demand from japan , but if an announcement is made to the contrary there will be a lot of shortcovering.I think it will be surprising how quickly the spot moves back up through $50 lb