Uranium rice set to rise againNorth American uranium producer says spot price at or near bottom
Barcelona (Platts)--19Mar2008
The CEO of North American uranium producer Denison Mines on Wednesday said he believes the spot price of uranium, currently at $74/pound U308, has reached or is close to a bottom.
"We expect the spot price to recover [during 2008] and to trade at or above the long-term price," which currently sits at $95/pound U308, Peter Farmer, CEO of the Toronto-based company said in releasing the company's fourth-quarter and full-year 2007 financial results.
Farmer said uranium supply is not keeping up with demand, adding that there are now 34 nuclear reactors under construction in 12 countries. Uranium supplies from government stockpiles and utility inventories also are failing to keep pace with yearly increases in demand, which Farmer said is increasing at an annual rate of 2%. And increasing production of mine uranium is proving challenging, he said.
Farmer said that in the fourth quarter of 2007, Denison's US-sourced uranium sold for an average of $89.84/pound and its Canadian uranium sold for an average price $74.37/pound. Full-year 2007 average sales prices were $99.11/pound for US production and $74.91/pound for Canadian production, he said.
Farmer said Denison expects to increase production in 2008 by 200% to 2.1 million to 2.4 million pounds U308. The company expects to sell 1.7 million pounds of that 2008 production "at or near market prices," he added.