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« Extract Resources Limited: Heading towards a Buy | Main | Vintage Wine Turns Sour for Financiers »
Monday
Feb082010

Uranium Prices Update 09 February 2010

Longer term price for Uranium.JPG

The chart above shows the current price of uranium standing at $60.00/lb according to TradeTech having come down steadily from around the $95/lb level. In a news release on January 1, 2010, TradeTech had this to say:

A declining trend in uranium prices that began in 2008 continued into 2009, as TradeTech’s uranium spot price fell 15 percent from US$52.00 per pound uranium oxide (U3O8) at year-end 2008 to $44.50 on December 31, 2009.

The uranium market attempted to recover from the effects of a global financial crisis that began in late 2008, and the spot price strengthened by mid-year. However, this trend was short-lived as several sellers competed aggressively to conclude sales and the spot price fell again in the second half of the year.

In early October, the spot price climbed briefly as BHP Billiton reported damage to the main shaft of its Olympic Dam that would take months to repair. The company declared force majeure on certain uranium deliveries, which brought a number of buyers, primarily traders and financial entities, to the market and the price rose to $50.00 per pound U3O8. By December, however, the spot price retreated as the US Department of Energy’s sale of uranium to fund cleanup of the Portsmouth uranium enrichment facility overshadowed the market.

“Buyers are expected to return to the market during the first quarter of 2010 as a number of utilities have indicated they can justify discretionary purchases for inventory at current price levels,” Klingbiel added. In addition, buying from Asia is expected to remain strong as India and China, in particular, forge ahead with plans for expanded nuclear energy programs to meet rising energy demand.

Well it would appear that we can take one or two positives out of their statement, however, uranium could take some time in convincing us that it is becoming everyones favourite play. We are half way through the first quarter and the spot price for uranium stands at $42.25/lb as the chart from U308.com shows. We will observe uraniums progress and look for positive signs of activity before going on the acquisition trail.

Uranium Chart 09 Feb 2010.JPG

All the best.






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Reader Comments (6)

No chance of a recovery here. With the US government holding 56000tons ( enough to supply the whole world for almost one year ) and Russia probably holding a lot more the shortfall in mining is of no consequence,. The US have now stated that they will not feed the market in 2011. The price is clearly being manipulated ( probably with cooperation of the miners ) so that they can continue to develop the mines without the fear of it becoming uneconomic. As more Nukes come online adjustments will be made to the supply line to keep the price around the $60 mark

February 9, 2010 | Unregistered Commenteruranium bug

So, what are we saying? Should we be pulling up stakes for now and getting out of the game?
John

February 9, 2010 | Unregistered CommenterJohn Ell

They often say you should not sell out to get even but in this current market if you are even or have not lost much I would look for value elsewhere . Just look how uranium holders have lost out in last years recovery. If you got smashed in the sell off you do not have much alternative but to wait. ,but if you are over 60 you will probably be dead before any significant recovery.You can always get back in when moving averages do the golden cross.

February 9, 2010 | Unregistered Commenteruranium bug

The US is holding onto supply because they just might be starting to get it ! Boys, money has been taken off the table and where is the next BULL MARKET. Realestate? Come On. Look at the fundamentals and the amount of uranium that the world and US will need when Russia, holds on in 2013 when they do not renew with the US for supply. Grow up and buck up...the market is just getting started; patience is a virtue and uranium is in shortage !

February 9, 2010 | Unregistered CommenterYellowcake

the price of uranium controlled by these "2" groups is so ridiculous...How come other commodities (any type) or grains is not goverened by such an idiot method ??? these grps. get paid off & keep the price low to supress uranium companies future (stock price)...many uranium companies have gone out of business the last 2 years with the games these trade grps. are playing.How can every other commodity go up the last 2 years., yet uranium is the only one to go down 2 plus years...Cameco has this disaster @ Cigar Lake & 3 years later can't tell the markets anything new & BHP has their problem & Kazatom has said a month ago; at these crazy (low) prices, we're cutting production..Yet these "2" paid off "grps." (ask CEO of Paladin Energy what he thinks of these "2" grps.) ignore these huge stories & keep the price low....It's called shorting the group (aka: RBC)to fill the pockets of the people paying the money...Alot goes on behind the scenes you or I will never know the full extent...As long as the price stays down, uranium stock prices do the same which should not be the case...There are a few companies that have real growth & are doing a great job, but the shorts just keep pushing them down; it's just a big game to them & it's about making money for themselves & that companies have to file for bankruptcy & lay off workers & shareholders loss money or bail on this sector after years of frustration; they (TSX & wall st.) don't give a RATS ASS !!!!!!!!!!!!!!!!

February 9, 2010 | Unregistered Commenterrico

Team,

Its a tough call all right, we had hoped that Cameco might lead the way when its stock price rose to $33.00 or thereabouts back in early January, but it ran out of steam and dropped back to trade at $27.00 today. Activity in the uranium stocks area appears to be rotational at the moment so we could be in for more of the same for the next six months or so.

February 10, 2010 | Unregistered CommenterUranium Stocks

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