u prices could fall on increased product

http://www.mining-journal.com/Breaking_News.aspx?breaking_news_article_id=3850

Australia says 2008 uranium prices could fall on increased production

Uranium price could fall on increased production
Uranium prices may fall 15% next year as demand growth moderates and new mines start production, the Australian Bureau of Agricultural and Resource Economics said.

The average spot price for the radioactive metal may drop to US$85/lb in 2008, down from a forecast US$99 this year, the government`s commodities forecasting agency said. Uranium mine production is set to jump 18% in 2008 on top of a forecast 9% increase this year.

Spot prices of uranium oxide reached a record high of US$138/lb in June, triple a year ealier, on rising demand from utilities and concerns that supplies are limited. Prices have since slipped almost 40% on the indefinite closure in Japan of the world`s largest nuclear power plant and a US government auction of the metal.

"World uranium consumption is forecast to remain stable in 2008 at 78,000 t of U3O8 as new generating capacity offsets the impacts of the closure of the Kashiqazaki Kariwa nuclear power plant in India," the bureau said in its quarterly report.

The bureau`s forecast contrasts with more bullish estimates from JP Morgan and Lehman Brothers. JP Morgan said in a September 19 report that spot prices may climb to an average of US$130 next year, from US$120 this year. Lehman predicted an increase to US$115 next year.

Australia`s uranium output may rise 13% to 10,829 t in the year ending June 30,2008, from 9,594 t last year. This is mostly due to increased production from Energy Resources of Australia Ltd`s Ranger mine.