Study Sees a Uranium Price Lift Ahead as Buyers Venture Back
Source: Mineweb.com (5/30/08)
Sydney-based Resource Capital Research (RCR) believes that a perceived recovery in the uranium price in the next quarter is linked to signs of improved market sentiment for uranium equities both on the Australian and Canadian bourses.
RCR said the industry average, long term uranium price was now estimated at $US90/lb, down $US5/lb from where it had held firm for nearly 12 months to March 2008.
RCR's senior analyst, John Wilson, said positive market sentiment has returned, driven by indications the spot uranium price is about to head up, combined with relative stability in the equity markets following the sub prime rout.
Forward indicators (fund implied price) currently indicate an expectation for an upward correction to the uranium price to around US$75 (+25%). In the past 3 months the fund implied price has ranged from US$57/lb to US$90/lb. According to recent market commentary by Trade Tech "[uranium] buyers are beginning to venture back into the market and sellers are less willing to cut prices".