Spot Price Falls, as Does Exploration Spending

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". . .while some spot sellers are starting to give on asking price, others are perfectly happy waiting for the eager buyers they know will eventually come."

Spot uranium prices fell US$2 this week to US$51 a pound U3O8, according to price publisher Ux Consulting. And while rival publisher Tradetech's uranium price estimate hasn't budged this year, sitting stable at US$52 a pound, analysts suspect sellers are starting to soften, reducing prices to attract buyers. UxC says six-month delivery times on contracts are starting to gain in popularity, replacing shorter terms. This has historically been good news, but longer contracts won't turn the tide in a soft market without help from a strong spot price.

For now, while some spot sellers are starting to give on asking price, others are perfectly happy waiting for the eager buyers they know will eventually come. UxC says long-term uranium prices are unchanged at US$70 a pound U3O8, where it's poised to stay 'til the end of the month. March futures are trading at US$50 a pound, jumping to US$58 come September, US$62 come December, and US$64 come March 2010.

According to the weekly uranium update from Toll Cross Securities Inc., junior explorers dropped 2% this week, advanced explorers fell 5%, production visibility companies fell 8%, and producers dropped 3%. The Toll Cross Junior Uranium Index, which monitors a basket of stocks deemed by Toll Cross as representative of the sector, fell nearly 5% to 163,85 from 171.74.

So there you have it. Typically, euphoric New Year's optimism tends to linger long after the taste of champagne is washed from celebratory lips. But here, January is only half over and while talks of a "nuclear renaissance" have again resurfaced in some circles, the reality is we're still in an economic downturn, New Year or not.

Bulls keep saying uranium's fundamentals are solid, but even if that's true, for the moment at least, the continuing credit crunch is outweighing them.

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