Uranium Price Falls Again: Possible Buying Opportunity
Source: Seeking Alpha (7/17/07)
Uranium prices fell for the third straight week as buyer interest continues to cool. TradeTech's spot price indicator fell US$4 to US$129 per pound of uranium, it said in Friday's issue of Nuclear Market Review.
An auction of 392,000 pounds of U3O8 equivalent last week drew limited interest from buyers as the availability of supply from other sellers made auctions less appealing, TradeTech said. Cameco Corp.'s (CCJ) announcement that the start up of its Cigar Lake mine could be delayed another year until 2011 demonstrates the anticipated shortfall that remains in the long-term uranium market.
While total worldwide demand for 2008 to 2013 is estimated at 1.1 billion pounds, planned production is forecasted to be roughly 0.9 billion pounds of U3O8 equivalent, the report said. Planned production problems could push this shortfall higher.
...But has recent weakness led to a buying opportunity in uranium equities?
They may be exiting the downtrend for the year, according to Matthew Smith of TheInvestar Group. "We may see the juniors move a little ahead of producers at this point, in terms of percentage moves upward as investors move back into the most beaten up stocks," he added.