IRON ORE and URANIUM likely to have a good daytoday as another broker (UBS Warburg) upgrade their iron ore and uranium price forecasts. They now expect a 25% increase in negotiated iron ore prices for 2008 compared to their previous forecast of a 10% rise. The move comes on the back of higher demand and supply restricted by shipping markets. They have also upgraded their uranium, Molybdenum, lead and copper price forecasts. Their uranium forecast for 2007 are up 34%, with lead up 31% and molybdenum up 30%. They say the uranium fundamentals remain very strong with a uranium price forecast up from US$95 to US$127 for 2007, US$110 to US$196 for 2008 and US$120 to US$150 for 2009. This has resulted in the following changes:
RIO earnings up 13% and 22% in 2008 and 2009. BHP earnings up 8% and 11% in 2008 and 2009. Paladin earnings up 72% and 54% in 2008 and 2009. Upgraded ERA to a BUY but they say Paladin remains their preferred uranium play. Interestingly they say they expect to see RIO perform better into results because the PE is now below BHP’s and they expect the market to run the stock ahead of a possible capital management initiative with the results.
AGS Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
