WOW! $52 uranium....I hadn't seen this 'til this morning...
Uranium Price Surpasses $50
– Can the Market Sustain this Record Price? –
Denver, Colorado, August 31, 2006—The spot market price for uranium climbed to US$52 per pound uranium oxide (U3O8) today—marking a record level in the history of uranium price reporting, begun nearly 40 years ago by NUEXCO in 1968.
In the past six months, the uranium spot market has broken through two price barriers. In March 2006, the price for uranium rose above $40 per pound U3O8 for the first time since January 1980. The uranium price first reached $40 in April 1976 and remained in the $40 range until January 1980. However, the market in the late 1970s was considerably different than today’s uranium market, which begs the question: Is today’s record price level sustainable? “We think it is,” said Treva Klingbiel, president of TradeTech, LLC, a nuclear energy market consultant. “After years of industry consolidation and tight financial conditions, uranium exploration has suffered and there will be a time lag, perhaps as long as five to seven years, before the supply side can fully respond. Thus, secondary supplies (primarily uranium inventories) will need to continue filling the ‘supply gap.’ With little strategic stock to mitigate supply disruptions, prices can rise dramatically, and in fact, have done so,” Klingbiel advised.
The biggest difference in the uranium market today is that the supply/demand outlook is much clearer than it was a quarter century ago, based on more realistic contract terms and uranium requirements. “The challenge will be to bring more uranium production online to assure market balance,” Klingbiel added. Since 1990 uranium requirements have outstripped uranium production. World uranium requirements
are expected to increase steadily throughout the next decade to a peak of over 200 million pounds U3O8, according to TradeTech. Uranium producers are gearing up for this added demand. A number of existing producers are planning for expansion, while new junior producers are preparing for uranium exploration and production. |
