Uranium Returns To Weakness

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February 19, 2013 10:13 AM EST

By Andrew Nelson

Uranium trading was pretty steady last week, with six transactions reported and just under one million pounds changing hands. The problem for suppliers is that deals were transacted at progressively lower prices as the week progressed.

Utilities, traders, producers and financial entities were all active in the market, with industry consultant TradeTech noting that a fairly broad range of prices were seen depending on delivery locations and timing. Those sales involving immediate delivery were lower, while delivery for later in the year garnered higher prices.

When the dust settled, TradeTech's Weekly U308 Spot Price Indicator was set at US$43.00 per pound, down US$0.50 from the week prior.

The soft prices came as little surprise to commodities analysts at Commonwealth Bank ((CBA)), who suggest there is still too much supply in the uranium market. The bank has moved to lower its uranium price forecast by 9% in FY13, by 12% in FY14 and by 2% for FY15. The bank's new prices are US$45/lb, US$54/lb and US72/lb respectively.

There were signs of life in the term uranium market, with TradeTech reporting three transactions that saw less than 500,000 pounds change owners. The activity did little to change market dynamics, with TradeTech's Mid-Term price staying put at US$49.00 per pound.

There are still some active shoppers in the term market, but this has had no impact on TradeTech's Long-Term Indicator, which has stayed held firm at US$57.00 per pound.


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