Uranium prices continue to rise with both of the major market monitors of the nuclear fuel raising their price indicators recently.
Ux Consulting hiked its price by US$3 to US$93 per pound this week, citing more activity in the market. The firm expects prices will climb as offers were being reported above this level. TradeTech moved up US$5 to US$90.
Uranium hit an all-time high of US$136 at the end of June, but subsequently fell to US$75. Spot prices were as low as US$7 per pound in 2000.
UxC has a bullish view on the market, noting that bad news seems to dominate positive developments these days, RBC Capital Markets analyst Adam Schatzker told clients in a note.
Some of this bad news includes a shortage of sulphuric acid in Kazakhstan, which is used for in situ recovery projects. This is leading to production cuts by companies like Uranium One Inc.
Cameco Corp. pushed back the date it expects the Cigar Lake mine to come on line and now sees this happening sometime between 2011 and 2014.
Meanwhile, a deal between the U.S. and Russia to buy uranium from dismantled Russian nuclear weapons expires in 2013. Given that the market isn’t exactly awash in inventories, this development could provide support for the high prices required to encourage exploration and project development, Mr. Schatzker said. Russia also recently asked for prices paid by Cameco to again be renegotiated in order to reflect higher spot prices.
Given the recent US$15 rise for uranium, the analyst says it is showing signs of strength in the near term. RBC forecasts spot prices will continue to strengthen, potentially hitting US$100 per pound by the end of the year.(canada)
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