Uranium industry in disastrous market situation
Uranium Nearing Terminal Velocity 9 News Finance By Andrew Nelson, 30 July 13 The steady and significant retreat of the uranium price over the month of July gathered even more pace last week. Volumes were steady, with six transactions involving around 700,000 pounds of uranium being reported, but the spot uranium price still fell 5% over the five days.
We are now looking at levels last seen in November 2005. This was just before that time everyone thought uranium would make for a great investment, pushing the price up to US$138 a pound by June 2007. The GFC interrupted, then we had the Fukushima incident in March 2011 and uranium has been moving steadily south ever since……
the uranium market seems caught in a vicious circle. The lower prices are pulling out more buyers, but these buyers are bargain hunters. Thus the lower the price, the more buyers. The more buyers, the more price pressure. The more price pressure, the lower the price goes. For months sellers have been holding firm, but the dam broke earlier this month and it seems sub $40 dollar prices are not only a reality, but now a sub $30 nightmare is being dreamed about……
By last Friday, TradeTech’s Weekly U3O8 Spot Price Indicator had fallen another US$2.00 to US$34.50 a pound…..just like the spot market, the higher levels of activity are proving disastrous for prices. Mid-term uranium prices have dropped in conjunction with spot prices, which has a number of US and non-US utilities contemplating entry into the term market to take advantage of current prices.
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