The two major indicators for the uranium price are TradeTech and UXC, however they do not always agree on the uranium price and so this sometimes leads to some confusion.

However there appears to be a lot more misunderstanding in the US Department of Energy.

TradeTech have the uranium spot price at $129/lb however UXC have their price as $120/lb. This shows that in a thin market such as the uranium market, there can be a great deal of disagreement on what the price actually is. The more important figure to study is the long term price, which stands unchanged at $95/lb despite the recent drop in the uranium spot price.

Although psychologically it can be disheartening watching the spot price fall, we must bear in mind that the long term indicator remains unchanged and long term uranium prices are going much higher than present levels.

However, the more confusing event is that the US Department of Energy is going to sell the equivalent of 520 thousand pounds of U3O8 by auctioning up to 200 metric tons of uranium hexafluoride (UF6). In our opinion, it is illogical to sell your governmental uranium reserves, at a time when uranium is in tight supply and other governments such as China are getting their hands on uranium reserves wherever they can. Presuming the DOE gets roughly the current spot price, the auction will generate about $62,400,000, enough for some politician to buy their re-election no doubt, with no consideration for how the government is going to replace that uranium, or if they will be able to.

Bearing in mind that the uranium price has recently took a small dip, the US government should be buying uranium, not selling it. We believe that it could be the case that the USA will end up trying to buy back this uranium, at higher prices, in the future. The government should be thinking more long term, for the benefit of the people, who need more nuclear power to ensure a secure supply of energy and having uranium is crucial to maintaining that supply.

On a more positive note, this is a relatively small amount of uranium and perhaps the DOE will not continue this pattern of selling crucial, strategic and essential reserves of uranium.