Uranium Price Forecasts Trimmed

Source:

National Bank Financial analysts in Montreal have scaled back their spot price expectations for uranium to $100/lb for 2007 (from $120/lb previously), to $120 for 2008 (from $150) and $125 for 2009 (from $135). In a note to clients, the analysts say this year’s runup of U308 (uranium concentrate otherwise known as yellowcake) to a record high $138 may have been caused by speculating investors.

National Bank Financial analysts in Montreal have scaled back their spot price expectations for uranium to $100/lb for 2007 (from $120/lb previously), to $120 for 2008 (from $150) and $125 for 2009 (from $135). In a note to clients, the analysts say this year’s runup of U308 (uranium concentrate otherwise known as yellowcake) to a record high $138 may have been caused by speculating investors.

The price of uranium has increased eight fold in the last four years. “The impressive gains made by the metal can be attributed to the lack of growth in its supply and the increasing adoption of nuclear energy across the world,” according to a report by Ativo Research of Chicago. However, the spot price of uranium, the metal used to make fuel for nuclear reactors, has fallen 24% to $105 since early August, off a record high of $138 in June...

However, the Chicago analysts at Ativo Research don’t discount another surge in prices: “According to the International Atomic Energy Agency, the 438 nuclear reactors in operation currently require 150 million pounds annually. With 130 more reactors slated to be built over the next 15 years, the supply situation looks grim.”...

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