Friday night. According to TradeTech, four transactions totalling over 600,000 pounds U3O8 equivalent were reported for the week. Demand continues to strengthen as current buying interest is diverse with utilities, producers, and intermediaries all participating in the spot uranium market this week. Over the past two weeks, sellers have consistently raised offer prices and although a gap remains between buyers and sellers, the buyers have exhibited a greater willingness to move than sellers. Over the weekend, one of the mining industry's most-read newsletter writers dedicated his entire monthly update to uranium and its very bright future. Lawrence Roulston's latest issue of Resource Opportunities begins with, "Uranium stands out from the other metals, having barely budged from the post-melt-down low. Over the last year, nearly all of the metals have recovered from the lows following the financial crisis. The uranium price has been held back by a number of factors, which are poised to change over the coming weeks. As the uranium price finally begins to track the other metals higher, the companies in the sector will also come alive." Roulston added, "The fundamentals of the uranium market are exceptionally strong," and, "It is important to
note that the long term contract price has been consistently above the spot price since the collapse of the spot market in 2007.
This shows that operators of nuclear power plants are prepared to pay substantially more for uranium supplies than indicated by the spot price." Like we have highlighted many times – investors pay attention and trade stocks based on the spot (for the most part), while most (80%) of the business itself (in the uranium sector) is done under long-term contracts. Roulston states that, "Inevitably, the spot price will get back into alignment with the long term price. That thinly traded spot market could rebound quickly with any signal that interest is returning to the uranium market."Also over the weekend, Bloomberg noted that China has reportedly approved the construction of 28 new commercial reactors under a revised target for 2020 to meet growing demand for clean energy and accelerate development within the nuclear industry. Each of the 1,000 MWe reactors will cost as much as US$2.1 billion. Construction of 20 of the 28 reactors has already begun. It is expected to take just over four years to build one reactor. Presently, the country’s installed nuclear generation capacity totals about 9,000 MWe. Details of the government’s revised plan will be announced later this year, according to China National Nuclear Corp. According to Tony De Vuono, senior vice president and chief technology officer at Atomic Energy of Canada, "China will be the world’s nuclear industry leader in terms of technology and also in terms of planning for long term 30, 40 years. It’s pretty close to that right now. The Chinese government is very committed to nuclear."
Etract from Canaccord Morning Coffee