Media - In the Market
Update for the public provided three days after publication.
Nov 21, 2014 - After climbing steadily for the past two weeks, the spot uranium price fell sharply this week as buyers retreated from the market. TradeTech’s Weekly U3O8 Spot Price Indicator, which was $44.00 just last week, closes out this week at $38.00 per pound U3O8—down $6.00 (13.6%), in the second largest week-on-week price drop (in percentage terms) since 1996. While it is not unusual for the spot uranium price to exhibit price swings from week to week, the volatility of the past few weeks is significant. The last time that the Weekly U3O8 Spot Price Indicator fell more than 13 percent in one week was immediately following the Fukushima accident in March 2011. It is important to note, however, that today’s spot price is still up 21.6 percent from nearly four months ago when the Weekly U3O8 Spot Price Indicator stood at $31.25 on August 22. Several sellers responded to the drop in demand by lowering offer prices, which did little to attract buyers initially. It was not until late in the week, when offer prices fell below $40.00, that buying interest re-emerged with several transactions closing at, or very near, today’s Spot Price Indicator as the week came to a close. A total of seven transactions are reported; utilities, traders, producers, and financial entities all acted as buyers. Today’s volatility is due to a multitude of factors, including the effects of Fukushima, which have been working their way through the market for several years, as Japan now appears set to restart reactors next year. In addition, the production sector has adapted to lower prices by contracting and/or postponing expansion plans. Finally, investors are returning to the uranium market. However, the exit of Goldman Sachs and Deutsche Bank from the uranium trading arena has contributed to less market liquidity. The spot uranium market, which is naturally a thin market due to the large volume of material delivered under long-term contracts, can fluctuate dramatically when individual buyers or sellers move in or out of the market. The past few weeks are a prime example of just how sensitive the spot uranium market can be. TradeTech’s Weekly U3O8 Spot Price Indicator is $38.00 per pound U3O8, down $6.00 from last week’s value and a decrease of $3.50 from the November 20 Daily U3O8 Spot Price Indicator. read more