RE:RE:RE:RE:Is the Spot Price dead? It is an excellent synopsis on the Uranium supply and demand logic and well worth another look. I am most interested in what is going on behind the scenes in Kazakhstan. The Kazatomprom IPO is due to be floated this year and I cannot envisage the Kazakhs wanting to launch that at historically depressed prices. So I think they will do two things. The first is stop selling directly to the spot market to dry up cheap supply. They will sell to the Swiss trading arm instead who will stockpile it. The second is they will start negotiating long contracts at much higher than spot prices...also through their Swiss Trading Arm.
It will be fascinating to see this unfold. I also have a much better understanding of the role enrichers have played in deprtessing the market and why that role will diminish. The enrichment facilities are keeping their plants running by enriching tailings back to natural Uranium however I read a really good article that maintains that the cost of doing this is exponential to the level of tailings enrichment. In otherwords as enrichers are forced to use lower and lower grade tailings the costs rise exponentially and they start to lose money.
As sstv said earlier the lower for longer the price of Uranium is the more production must come off line. As they say the cure for low prices is low prices.
Sooner or later this market has to give since companies cannot continue to lose money. The demand is still there and increasing therefore above ground supplies are decreasing every day.
I think I am well positioned to take advantage of this but I'll not make predictions as to when it will turn - however the stars are lining up one by one and it is just a matter of time.
Thanks for your post. Always interesting.
Malcolm