Uranium Spot Price Could Regain Lost Ground by Year End: Haywood

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Haywood's analysts forecast that "while the spot price has weakened and could weaken a tad more, by the end of the year prices could regain much of the lost ground, setting the stage for a robust 2008 and beyond.

In an analysis published yesterday, Canada's Haywood Securities predicted that, by year end, the spot market for uranium could regain some of the ground it has lost since the metal reached a high of $136 in mid-June.

Analysts J.W. Mustard and Chris Thompson said the rapid price increase from April to June was generated more by speculative discretionary buying than by a demand from utilities companies.

Currently the spot price has declined 34% to the current $90/lb level. To compound the situation, the analysts noted that "as the utilities seem to have taken a collective summer break, in conjunction with a lack of discretionary buying, the price has a clear negative trend."...

Haywood's analysts forecast that "while the spot price has weakened and could weaken a tad more, by the end of the year prices could regain much of the lost ground, setting the stage for a robust 2008 and beyond. With potential brownouts in some areas like India, it is possible that near-term spot could exceed the recent highs."

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