Uranium spot prices rebound on 'extremely thin' supply
Washington (Platts)--14Dec2010/640 pm EST/2340 GMT
After dipping slightly early last week because some sellers were trying to place material before the end of the year, the uranium spot price rebounded as available uranium was quickly absorbed, analysts said.
On Friday, TradeTech raised its spot price to $60.50 a pound U3O8, up 25 cents from its December 3 price. Ux Consulting, which bases its spot price on the most competitive offer price available, raised its spot price Monday to $61.75/lb, up $1.75/lb from Ux's December 6 price.
This price -- the highest seen in 2010, Ux said -- also is 39% higher than the price at the beginning of 2010.
TradeTech said spot supply "is extremely thin" now, with most sellers "holding firmly to their offer prices and looking ahead to rising demand during the first quarter of 2011."
Ux noted that primary producers have placed a higher-than-expected volume of uranium into the spot market over the past several months, taking advantage of rising prices. Some traditional spot sellers, such as trading companies, also committed inventories under mid-term contracts (delivery in late 2011 and in 2012), thus reducing pressure to sell late in the year into the spot market, several other analysts said.
New to the market is Taiwan Power, which is looking to buy 400,000 lb U3O8-equivalent in two lots -- one for 250,000 lb U3O8e and the other for 150,000 lb U3O8e, sources said. Delivery of either lot can occur through the end of May. Offers are due to Taipower by December 21.
Ux's broker average price -- a daily calculated midpoint of bids and offers that brokers ICAP Energy, Evolution Markets, and MF Global report -- was $60.92/lb on Monday, up from the $59.95/lb BAP on December 6. The Platts NuclearFuel range for the week was $59-$63/lb U3O8.
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