An article on current Uranium market
By Luke Brocki - Exclusive to Uranium Investing News and U3O8.biz
Spot uranium prices fell $3 this week to $48 a pound U3O8, according to price publisher Ux Consulting.
The sudden softening of the market follows several weeks of quiet,but it seems sellers are no longer content to hold out for strongerdemand.
Ux reported that at least one seller dropped its offerprice in order to attract buyers. Trouble is, for sellers, utilitiesare still happy using material from their well-stocked inventories.According to Ux, delivery times for uranium were also gettinglonger, with mid-term delivery schedules preferred over immediatedelivery options, thus, even though demand is present, it’s not onmaterial for immediate delivery.
In January, rival publisher Tradetech dropped its priceestimate $1 to $50 a pound U3O8. Long-term uranium prices are unchangedat $ $70 a pound U3O8 and are expected to stay there through the end ofFebruary. The futures market continues to look good, with March futurestrading at $50, June futures trading at $57, September contracts worth$58, and December contracts worth $62. 2010 is expected to bring moregains with March futures trading at $64 a pound U3O8.
According to the weekly uranium update from Toll Cross SecuritiesInc., uranium companies are down across the board, at least thosemaking up the basket of stocks reflected in the Toll Cross JuniorUranium Index, which fell 1.5 per cent this week to 158.13 from 160.53.
But one of uranium’s biggest players is trying hard not to letfloundering uranium prices and the global economic downturn affect itsexploration activities. Canadian uranium giant Cameco Corp. is focusingon its Australian properties of late. The Australian Broadcasting Corporationreports Cameco will hire environmental scientists next month to startbaseline surveys for water, dust and radiation levels south of AliceSprings.
Over in Namibia, an Australian company has just stumbled upon amassive uranium deposit and is now studying the feasibility of miningit. World Nuclear News reports Extract Resources has found a massivedeposit alongside the existing Rössing mine. Extract announced for Zone1 of its Rössing South deposit an inferred resource of 41,600 tons ofuranium at a grade of some 0.037 per cent, compliant with NI 43-101standards.
WNN reports Rössing South lies about seven kilometres awayfrom the Rio Tinto-controlled Rossing mine and current figures rank itfourth-biggest in Namibia, after Rössing, Langer Heinrich and Trekkopje.
Australian online financial news provider Business Dayreports BHP Billiton’s multibillion-dollar expansion at its Olympic Damcopper/uranium/gold operation may be slowing down, which has excitedpure uranium plays, in a classic twist of Schadenfreude. BHP hasn’tannounced a slowdown, but Business Day reports the company just cutsome 200 jobs associated with the project, since it doesn’t expectenvironmental clearance until next February.
For the time being, news of delays could firm the market, especiallyif bulls can convince the rest of the uranium players that globaldemand threatens to outstrip supply.
If a supply/demand gap indeedexists, we should soon see upward movement in the spot market.