Uranium Miners on the Prowl as Spot Prices Fall
Source: Mineweb.com (5/9/08)
Yellowcake miners and processors are on a massive mission, flexing their financial muscles investing in new uranium projects and expanding existing ones, in the face of the metal's spot price that has recently caught a cold.
The uranium spot markets are under pressure and the price has been in freefall. In late June last year, uranium spot prices hit the highs at US$136 per pound, from a low of US$7 per pound in 2000, bolstered by a tight market and speculative buying. Currently, the price is down by slightly over 60% from June's, sending quivers throughout the markets.
This week, leading industry consultant Ux Consulting revised its uranium spot price indicator to US$63, $2 less than fellow consultant TradeTech's weekly benchmark, and less than half the peak of US$138 per pound uranium seen a year ago.
This came in less than a week after both the consultants lowered their long-term price benchmark to US$90 per pound uranium from US$95. Bloomberg reports that last week investment house Macquarie was forecasting an average price of US$65.10 per pound this year and US$60 per pound next year, which was a sharp reduction from its previous forecast of $89.90/lb this year and $82.50/lb next year, an issue it attributed to a "minor"' supply surplus.
According to South African Business Day, London-based securities house Fairfax concurred with Macquarie saying market participants were reluctant to conclude deals as a surplus was expected next year.
But such a bleak short and medium term outlook in the uranium spot markets has not deterred the miners and processors, who are on the prowl, clinching new acquisition deals, with some expanding their existing projects with the feeling that markets will turn around again.