Uranium Rises for a Second WeekUranium Rises for a Second Week on Speculation About ETF Buying
By Anna Stablum
April 27 (Bloomberg) -- Uranium rose 6 percent, advancingfor a second straight week, on speculation about possible buyingof the nuclear fuel by an exchange-traded fund.
Uranium-oxide concentrate for immediate delivery climbed$2.50 to $44 a pound, Denver-based pricing service TradeTech LLCsaid in a report on April 24. Prices gained in the prior weekfor the first time in almost six months.
“Short-term bullish momentum may come from one of theuranium ETFs possibly raising money to buy uranium in the spotmarket over the next three to six months,” Max Layton, ananalyst at Macquarie Group Ltd. in London, said by telephone.
Nufcor Uranium Ltd., located in St. Martin, Guernsey, andVancouver-based Uranium Participation Corp. are the world’s onlypublicly traded investment holding companies that invest in thenuclear fuel, according to a March 4 report by brokerage firmRaymond James & Associates Inc.
“We are still strong believers that the spot price willdouble from its lows over the next two to three years as themarket moves into deficit on strong Chinese demand growth,”Macquarie said in a report. The bank predicted a “return ofinvestors” as prices increase.
Uranium climbed to a record $138 a pound in June 2007 ascommodity prices advanced. By the middle of this month, themetal’s price had slumped to a 2009 low of $40.50 a pound asinvestors covered losses in other markets and the globaleconomic slump sparked concern about energy demand.
China aims to have 100,000 megawatts of nuclear capacity by2030, up from about 9,000 megawatts now, Gu Zhongmao, a deputychief at the China Institute of Atomic Energy, said on April 22.