Uranium Short Sellers Make Record Bets Against Cameco
Source: Bloomberg (7/17/07)
Demand from utilities to fuel nuclear reactors has plunged 72 percent from an April 6 peak, according to TradeTech LLC, which has tracked uranium prices since 1968.
Demand from utilities to fuel nuclear reactors has plunged 72 percent from an April 6 peak, according to TradeTech LLC, which has tracked uranium prices since 1968. In the second week of July, 3.4 million pounds of the metal was available, more than three times the amount purchased by power companies.
Investors in Cameco Corp., the world's largest uranium producer, in June placed a record number of wagers the stock will decline, according to data compiled by Bloomberg. Uranium for immediate delivery had its first drop since May 2003 last month and has fallen to $129 a pound, down 6.5 percent in three weeks.
"It would be unwise to be betting the other way in the short term,'' said Peter Richardson, head of commodity strategy at Craton Capital in Melbourne, which manages $315 million, and the former global head of metals research at Deutsche Bank AG. "We're looking at a period of excess in the spot market."
Shares of Saskatoon, Canada-based Cameco lost 15 percent since June 15. The stock closed last week at C$53.25 (US$50.83) after trading below C$10 four years ago. Cameco shares in June had more bets that its price will fall than any other company in the Morgan Stanley Capital International World Energy Growth Index, a global equity benchmark.