Spot Uranium Price Drops, But Niger Rebels Pressure Miners

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According to Nuclear Market Review [NMR] editor Treva Klingbiel: Sellers are for the first time in many, many months showing a willingness to sell below the current published price in order to attract a willing buyer. As a result, TradeTech's Spot Price Indicator dropped to $133 per pound U3O8, a decrease of $2.00 from the June 30th Exchange Value.

The markets got what they were promised - further short-term uranium price weakness.

For the first time since May 2001, the spot uranium price dropped twice in two consecutive weeks.

According to Nuclear Market Review [NMR] editor Treva Klingbiel: Sellers are for the first time in many, many months showing a willingness to sell below the current published price in order to attract a willing buyer. As a result, TradeTech's Spot Price Indicator dropped to $133 per pound U3O8, a decrease of $2.00 from the June 30th Exchange Value.

NMR reported current active spot supply rose to more than 3.2 million pounds U3O8 equivalent. The closely watched active supply/demand ratio also rose - to 3.5 to the advantage of future uranium buyers. This confirms a reversal of the supply/demand ratio which favored sellers in late 2006 and early 2007. In mid December, we reported at least nine buyers were seeking about 5 million pounds U3O8. Klingbiel characterized active demand as 'extremely weak,' and explained there was an absence of 'have to' demand in the market...

The next potential squeeze on uranium supply could come from terrorism, not nature.

The world's seventh and eighth uranium producing mines are found in the Republic of Niger: the underground Akouta and the open pit Arlit. Together, they produced 3434 tonnes of uranium in 2006, according to the World Nuclear Association. This accounted for more than eight percent of the world's mining production last year.

How badly would this impact a tight uranium market if either of the Niger mines stopped producing?

A Paris-based spokesman for the Niger Movement for Justice [MNJ] Seydou Kaocen Maiga told reporters this weekend:This region has been declared a war zone by the government and in this situation we cannot allow the Chinese to continue extracting natural resources while civilians are being killed.

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