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Prices for uranium in the spot market have dropped yet again because of excess supply and anemic demand, drawing ever closer to quotes on long-term contracts.
Ux Consulting Co. has cut the spot price by $10 (U.S.) a pound to $110, while the spot price at the other industry bible, TradeTech, fell $3 to $120.
Ux contends that a correction is taking place in the spot market, with “motivated sellers aggressively liquidating supplies.”
The upcoming U.S. Department of Energy auction of up to 200 million tonnes of uranium hexafluoride, containing about 520,000 pounds of uranium oxide, in eight lots may be a catalyst for the spot weakness. “Sellers may be trying to place material prior to offers due in mid-September,” Ux suggests.
Looking forward, Ux Consulting sees “fewer sellers willing to sell at lower prices, but believes prices could retreat in the near-term and rebound once determined sellers have sold out and-or spot demand picks up.”
The long-term market remains active with 11 buyers looking for a total of 27 million pounds of uranium, with prices unchanged at $95 a pound.
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upsilquitch upsilquitch from Toronto, Canada writes: DOE is dumping excess uranium that it had to acquire to clear the market for Tenex to sell its uranium. Russia simply won't play ball on Megatonnes to Megawatts without being able to sell/dump its own Nat U into world markets. Defense forced DOE to ignore USEC corporate financial interests to get control over the Russian HEU. World urnaium market is hostage to the Russian demands. USEC is hooked to Defense Special Weapons Agency (DSWA)-controlled DOE. Its performing so badly; is on the chopping block; may be a gift to EnergySolutions. A new owner might break that stranglehold. DOE has been trying to force USEC to swallow dirty urnaium (Tc contaminated) without paying for the services. Its a double whammy to USEC: reeling from a DOE dump of a high volume of Russian (fungible) urnaium at the best of times; lbut now its on the heels of a bear market. Does the dumping may have something to do with closure of Cameco's Port Hope UF6 facility. The DOE urnaium is in the form of UF6. Whether there is a preplanned association or not, Cameco will have to weather the storm. The DOE uranium dump will be painful to Cameoc shareholders. Cameco's share value has dropped over 30% since mid-June (this would be a traumatic corproate economic crisis in any other sector ... shareholders would be calling for heads to roll). Cameco remains quiet about this DSWA-managed market circumstance since Cameco is obliged to put-up and shut-up under its joint security agreement with DOE/USEC/Tenex. The trade off for Cameco? - it gets unrestricted access to DOE DU stockpiles to upblend into the SEU product approved for production at Zircatec by the CNSC earlier this week. Swallowing a downslide in urnaium prices and company share values in the short run is tolerable only becasue Cameco has been given market access to supply fuel bundles to the US LEU burning reactors. From Russia, Paducha and Port Hope with love
- Posted 09/08/07 at 6:45 PM EDT | Alert an Editor | Link to Comment
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