Spot has made a little come back today - at moment up 1.120% VALUE: 56.880
Open link to read charts http://www.dataexplorers.com/news-and-analysis/uranium-predicted-recover-yet-short-sellers-remain-active
Uranium predicted to recover, yet short sellers remain active Tue, 2011-05-24 17:03 The Fukushima disaster caused the largest fall in the price of uranium for two years, yet a floor may have been reached as aggressive nuclear plans announced by China and India will double global uranium production, according to Bloomberg. Despite this, shorts remain active in a number of uranium producers and nuclear plant manufacturers. We use securities lending flow to look at investor sentiment towards Areva Sa (CEI), Uranium One (TSE:UUU), Uranium Resources (NASDAQ: URRE) and Uranium Participation (TSE:U), as well as the main ETF, Global X Uranium (NYSE:URA).
Up until the Japanese disaster showed construction flaws at the Fukushima plant, nuclear energy was seen as a potential solution to challenges posed by rising oil prices. The Chairman of Areva Sa, the world?s largest nuclear plant manufacturer, argues that a distinction needs to be drawn between what happened in Japan with older-generation reactors and the newer, safer reactors made by his company. Following the disaster in mid-March Areva shares fell over 20% before recovering a little and holding steady at around EUR 31. It took a month for the shorts to react, with short interest doubling to 4.5% of the total shares outstanding on loan. The chart shows how short interest has oscillated since Mid-April before returning to this level, which represents 80% of the supply of shares available to be borrowed, meaning it is hard to short more of this stock. This is because the supply of shares in the lending programs of long-only institutional investors halved earlier this month. It is worth noting that short interest was actually higher back in January this year.
The price of uranium fell as low as USD 50 per pound following the disaster, which prompted countries such as Germany and Japan to announce reviews of nuclear plants. It has recovered to over USD 56 with Morgan Stanley forecasting it will climb to USD 64 in 2011, according to Bloomberg.
Short interest in most of the major uranium miners increased in mid-March, but not significantly. Uranium Energy Corp has seen historically high levels of short interest, which began to build from a trough at the beginning of the year at 12% of the total shares to the recent high of almost 17% as the share price has plunged.
Uranium One Inc, a Vancouver-based mining company, has seen short interest decline a little from 6% in mid-March to 5%, with short interest perhaps tracking the share price, steered by the convertible bond. Uranium Resources Inc and Uranium Participation Corp have both seen mild increases in short interest to 7.9% and 1.8% of the total shares outstanding on loan.
Finally, short interest in the main uranium ETF, Global X Uranium shot up to 10% in the immediate aftermath of the disaster. It promptly halved and now stands at 4% of the total shares.
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