Utility interest emerged in the uranium spot market last week but was unable to satisfy all sellers, leading to a -5% price fall.<\/p>\n
By Greg Peel<\/p>\n
A cheer wet around the uranium spot market last week as a utility moved in with buying interest, just as has long been anticipated. But with sellers lined up and poised, not everyone was going to be satisfied.<\/p>\n
Thus when news reached the utility had settled the deal, those missing out took their omission rather poorly. A scramble ensued, sending the spot price lower through the week to take industry consultant TradeTech’s weekly spot price indicator down -US$1.20 or -5.3% to US$21.25\/lb. TradeTech reports seven transactions totalling 800,000lbs U3O8 equivalent.<\/p>\n
The spot price has now fallen almost -20% from its previous peak of $26.50\/lb in February. That peak followed a speculative rally from the prior multi-year low of $17.70\/lb in December. All along the market has been expecting buying interest to emerge at lower prices. So far that emergence has been limited.<\/p>\n
While some opportunistic buying has come into the market over past months, at the end of the day utilities remain well stocked.<\/p>\n
Buying interest does, nevertheless, continue to enter the mid and long term delivery markets. Participants have been looking for this increasing interest to have a positive effect on prices and a flow-through to the spot market but this is just not playing out as hoped. Many a producer continues to sell product at below the cost of production.<\/p>\n
TradeTech reports buying interest is expected to emerge in coming weeks, particularly for deliveries post-2020, as several utilities look to lock in low prices into the future.<\/p>\n
Buying interest has been expected to emerge in coming weeks for months now.<\/p>\n
Trade Tech’s term price indicators remain unchanged at US$27.00\/lb (mid) and US$35.00\/lb (long).
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