\n\tBy Greg Peel<\/p>\n
\n\tIt looked for all the world like long awaited buying interest from utilities – the real end-users of uranium – had appeared the week before last and might be set to gain momentum. But industry consultant TradeTech<\/span> reports two US utilities seeking a total of 500,000lbs<\/span> of U3O8<\/span> equivalent and a producer seeking 900,000lbs<\/span> for short term delivery have found little trouble in securing supplies. This meant little buying interest in the spot market last week where hedge funds continue to line up as sellers.<\/p>\n \n\tOnly four transaction totalling<\/span> 900,000lbs<\/span> of U3O8<\/span> equivalent were reported last week compared to the previous week's thirteen transactions for 1.8mlbs<\/span>. Prices were hammered early in the week although began to creep up again towards the end, but TradeTech's<\/span> indicative spot price is still down US$3.50 for the week at US$52.75\/lb.<\/p>\n \n\tFalse dawn or just a stumble? <\/p>\n \n\tThe big news in the local uranium world last week was the Australian government's push to sell uranium to India despite India's non-signatory to the Nuclear Non-Proliferation Treaty. This had investors rather excited and saw them push up the prices of local uranium producers. One must remember however, and this point was reinforced by BHP<\/span> Billiton<\/span> ((BHP<\/span>)) CEO Marius Kloppers<\/span> at his company's AGM<\/span>, that India already buys uranium from others, particularly Canada. India is not a new customer and thus will not alter net global uranium demand overnight.<\/p>\n \n\tThe uranium market is global, as Kloppers<\/span> pointed out. Outside of BHP's<\/span> Olympic Dam site which will take years to expand, and Rio Tinto's ((RIO)) Ranger mine which remains underwater, Australia's other major uranium mines are foreign-owned. For Australian listed uranium miners Rio, Paladin Energy ((PDN<\/span>)) and Extract Resources ((EXT)), production is centred<\/span> in Africa, and Rio is also trying to buy into production in Canada.<\/p>\n \n\tIn other words, having India as a customer will not alter the state of play that much and particularly not when some state governments, particularly that of uranium-rich Queensland, persist with uranium mining bans.<\/p>\n \n\tTradeTech's<\/span> indicative term prices remain at US$55\/lb (medium) and US$63\/lb (long).
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