U308 bottom ??
In the Market
Update for the public provided three days after publication.
April 3, 2009–Activity rebounded sharply in the spot uranium market this week with seven transactions reported. Both utilities and producers were active buyers this week and several utilities remain in the market evaluating offers. This demand is discretionary in nature, however, buyers are still searching for discounted pricing. Nevertheless, a number of market participants see this increase in activity as a strong indicator that a price bottom is in sight and that prices may be poised to firm in the immediate future. As a minimum, a significant portion of available supply has been absorbed as a result of this week’s purchases, and while supply remains sufficient to meet existing demand, the remaining sellers are less likely to cut prices aggressively in order to attract buying interest. TradeTech’s Spot Price Indicator is $41.25 per pound U3O8, on the basis of the most recently concluded transactions, down $0.75 from the March 31 Exchange Value. read more
March 31, 2009–Four
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3avril 2009
.....rbc.... attention H2/09
In the discussion between analysts and traders as to which mining sector stocks are the best bets, uranium plays seem to be amongst the favored.
The Royal Bank of Canada Capital Markets (RBCCM) team advises an overweight uranium position in its latest recommendations for its Global Mining Best Ideas portfolio. In fact, uranium is amongst RBCCM's top picks. "After record spot prices in 2007 and a subsequent hard correction, RBC Capital Markets believes the uranium spot price will rebound in H2/09. Significant production cuts were announced in late 2008 and RBC Capital Markets believes the supply side of the equation remains at risk, while demand appears to remain in line with expectations."
A look at uranium stocks as a whole reveals that on average prices are up 102.2 percent from the lows hit when the markets tanked. The uranium miner sector is rebounding quickly from the financial crisis. Yet, prices are still nearly 50 percent below their highs and with the imbalance in supply this is still prime time for investors to make smart uranium plays.
The long-term supply/demand fundamentals of the uranium market are what's driving this resurgence in investor interest. It's certainly not the uranium spot price, which has remained fairly static for months. While industry consultant TradeTech has recently lowered its spot price indicator to US$42 per pound U308, their long term price remains at US$69 per pound.
In fact, "March was very quiet for the uranium sector," remarked FNArena's Rudi Filapek-Vandyck. Only four transactions were completed on the spot market. "Buyers interest is discretionary and sellers seem willing to offer small discounts to attract interest, but they are unwilling to lower prices much further from current levels."
Uranium Plays on Mineweb's 100 of the World's Best Performing Mining Stocks