Rejuvenation of Spot Price Predicted for 2H 2008

Source:

In their Uranium Industry Report published Thursday, Haywood Securities forecasts primary uranium production at 113.5 million pounds this year, which is well below reactor demand as secondary uranium sources dwindle.

In their Uranium Industry Report published Thursday, Haywood Securities forecasts primary uranium production at 113.5 million pounds this year, which is well below reactor demand as secondary uranium sources dwindle.

Haywood predicts that the second half of 2008 will see a rejuvenation of the spot price.

Meanwhile, demand continues to outstrip primary supply, while a sustained injection of capital is needed to meet required primary production increases, according to Haywood.

In the report, Haywood analyst Geordie Mark noted that production costs have increased across the sector with the uranium price representing only a small fraction of operating costs.

The World Nuclear Association had earlier forecast uranium production of 124.8 million pounds of U3O8 this year, which had been projected to be a 16.5% increase on 2007 production. However, Mark said that, "based on the stilted flow of supply to venture on stream thus far due to various technical and infrastructural impediments, it is anticipated that 2008 production will rise only moderately above 2007 production."

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