GREY:RNSFF - Post by User
Post by
utellme101on Mar 06, 2008 2:42pm
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Post# 14609117
Good news on Uranium pricing for 2008
Good news on Uranium pricing for 2008Royal Bank of Canada Capital Markets is telling clients that "we think the sentiment of the uranium market has changed substantially in a very short period . . . our 2008 market balance estimate has shifted to a deficit (from a balanced market) and we think the spot market is set for a strong rally".
RBC CM puts its observations down to three recent events: Uranium One (UUU CN, C$4.90 a share) reducing production guidance from its Dominion mine in South Africa by 1.5m pounds a year; AngloGold Ashanti warning it may have to declare force majeure, and, Uranium Participation Corp. (U CN, C$11.65) buying 900,000 pounds on the spot market.
RBC CM's forecast for spot uranium prices over the next two years is $110/lb in 2008 and $100/lb in 2009. Uranium prices moved up from around $7/pound eight years ago to a peak of $136/pound in late June, 2007 and then fell sharply. This week, quotes were around $74/lb (down $1/lb on the previous week), according to Ux Consulting, a specialist uranium consultancy; peer group TradeTech this week quoted $73/lb (down $2/pound). The long term expectation for both Ux and TradeTech remains at $95/lb.