Uranium auctions push u3o8 to record highsU3O8 spot price up to US$138.00
Publisher: U3O8.biz
The second uranium auction in two days is believed to have pushed the spot price higher with a gain of another $5/lb. The utility companies that missed out on the first auction had another chance to buy uranium on Friday. We won't know the exact price until next week and rumour has it that it could be as high as $140/lb. This we should be able to confirm next Monday or Tuesday.
What is important to note is that the price rises are coming through quicker than ever as the scarcity of the product heaps pressure on the users. It is sweaty palm time for the Procurement Officers responsible for securing the supply for their power plants to remain operational. For the producers it is a question of holding ones nerve while the pressure builds and higher prices are placed on the table.
Uranium started the year at around $74/lb so in just 5 months it has gained a whopping $64/lb or about 86%!
Is it over yet? No way, there is another auction on the 12th June 07 just 10 days to go. Can you imagine the hastily arranged meetings currently being scheduled in order to formulate a winning strategy? All of the best negotiating skill sets in the world are sidelined and useless at this juncture. If your company is in the 'Must Have' boat or else, then you have to bite the bullet and get your hands on uranium regardless of cost, as the alternative is a shut down, unthinkable!
So what about uranium stocks you ask? And a good question it is too! Since the beginning of the year many of these stocks are now trading at lower levels than they were then. To what can we attribute this disparity? Well for starters there is the seasonal 'Sell in May and go away' crowd who have been selling across the precious metals board. There is also a certain amount of profit taking going on as investors take money off the table. This is a sensible thing to do in a normal situation. These moves may well prove to be correct, as uranium stocks are lower. However the question those sellers must now wrestle with is when do they get back in. This is a red-hot market sector that moves very quickly at times as evidenced by particular stocks gaining 10% in a single day. Ouch that hurt if you were on the sidelines.
www.u3o8.biz