Short or long term , the news is all bad for uranium industry

Uranium Contract Prices Slip, FN Area News, 4 Oct 11, by Greg Peel, Unlike the uranium spot market, which in recent weeks has been dominated by traders and hedge funds on both sides of the price, the uranium term market more represents legitimate supply deals between producers and utilities, and is thus more representative of ongoing longer term uranium demand.

Term uranium prices slipped initially after the Fukushima disaster, but for many weeks prices have remained stable in a quiet market in which spot traders have battled back and forth around the significant US $50/lb level in somewhat of a vacuum of uncertainty with respect to uranium’s future.

Last week, however, those stable term prices finally gave way.

Industry consultant Trade Tech’s mid term price indicator has fallen US$1 to US55/lb and Trade Tech’s long term price indicator has fallen US$2/lb to US$65/lb. The price falls may not be large but they are nevertheless significant in a market now dominated by the collapse of Japanese demand.

The falls come in a week when the spot prices again found themselves under pressure, and in which traders and hedge funds were the dominant players on both the buy and sell sides. Producers and utilities have largely moved to the sidelines…..

Trade Tech notes that the uranium market has has historically been well insulated from the immediate global economic cycle, given the long term nature of “real” supply contracts informing speculative spot deals, The mood has changed however, with the consultant suggesting “The thin and illiquid nature of the spot uranium market means that even the slightest shift in supply or demand can directly impact on price, which was evident during September.

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=C17C9937-A751-1D8D-D3E61D2E868B6821

Shares of Denison Mines and Uranium Resources Face Strong Downward Pressure, MarketWatch, NEW YORK, NY, Sep 30, 2011 (MARKETWIRE via COMTEX)–– Uranium stocks have struggled this month as prices for the radioactive material have plunged. According to the latest quarterly report by Resource Capital Research, uranium prices are down 27 per cent over the past three months and 23 per cent over the past year….

Uranium explorers that suffered double-digit share price percentage falls in the past one to three months include Cameco, Denison Mines, Uranium One and Paladin….

http://www.marketwatch.com/story/shares-of-denison-mines-and-uranium-resources-face-strong-downward-pressure-2011-09-30?reflink=MW_news_stmp

Kazakhstan Ends Rise In Uranium Production To Stabilize Prices Fox Business, By Christopher Pala & contributing to Dow Jones Newswires, October 03, 2011 ALMATY, Kazakhstan – After more than tripling its output of uranium in four years to become the world’s top producer, Kazakhstan has stabilized production to around 20,000 metric tons annually in order to avoid further depressing prices, Sergei Dara, Director of Strategic Development and International Projects at Kazatomprom, the state nuclear company, said Monday.

He said as long as prices remain at their current low levels, “Kazakhstan will not develop new projects and our production will remain at the current level.”..

October 4, 2011 - Posted by Christina Macpherson | AUSTRALIA - NATIONAL, business, uranium

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