RE:TD on Uranium and some of my thoughts fwiwSorry Quakes/Rover but if anyone on here lacks credibility it should be you with your completely one-sided, unabashed pumping of FCU all the way down from the highs over the last 2 1/2 years. What's your agenda? You haven't done anyone any favors. As for Dev reducing spending I welcome the news but remain in show me mode.
CanadianBuck wrote:
Key Points
The Ux Consulting (UxC) spot uranium price declined 6.6% last week to $21.25/lb (-$1.25). The September month-end term price is maintained at $38.00/ lb. The three year and five-year price indicators declined to $25/lb and $30/lb, down US$1/lb and US$1.75/lb, respectively. The spot uranium price has declined 38.4% year-to-date.
Spot uranium market reflecting realisation that conditions are very difficult The plunge in the spot uranium price since mid-summer is reflecting a growing realisation by market participants that supply remains abundant and demand is highly discretionary. Despite spot prices being at their lowest level since February 2005, spot activity remains limited according to UxC. The increased role of enrichment in spot uranium supply, strong mine production, few production curtailments and some selling from inventory are all contributing to the depressed market sentiment. UxC has characterised the recent price weakness as a "weak capitulation", noting that supply adjustments have not been significant enough or fast enough to bring supply and demand into equillibrium.
Term demand interest piqued by lower spot price trend Term demand has been moderate over the past several weeks, according to Ux with several contract awards and new demand. That being said, term demand this year is still tracking well below last year at 40 million pounds versus >56 million pounds by mid- October 2015.
Cautious uranium price outlook maintained - We expect that the uranium market will remain well-supplied through 2020 and as a result utility demand will be highly discretionary. Our uranium price deck is summarised later in this note. Our LT price of $55/lb (starting in 2020) reflects our view of the incentive price required for the development of new primary uranium supply.End of report
About the only positive thing to say is that a few years ago (before Japan) most of these analysts were very wrong on their bullish forecasts, so perhaps as the bearish sentiment gets heavily one sided here now, they may turn out to be too bearish and wrong again. Certainly prices have/are reflecting the negative outlook to a large extent already in both stocks and Uranium. But we need some kind of bullish event/trigger to change the sentiment and the wait and see attitude of the Uranium buyers. What or when will that be? I don't know but when it happens you will recognize it and these out of favor U stocks will be big buys. Especially Cameco and maybe even FCU if Dev hasn't depleted the treasury. For now I sit on the sidelines waiting for that catalyst. GLTA