Uranium Prices Continue To Climb
By Dave Brown - Exclusive to
Spot uranium continued to demonstrate upward price movement, increasing $0.75 to $46.00 per pound reported by Trade Tech and $46.50 from UxC trade consultants. A total of over 1 million pounds uranium equivalent changed hands in seven transactions. The bulk of material was purchased by intermediaries, although utilities, producers, and intermediaries all participated in buying contracts. Buyers exhibited an increased willingness to pay higher prices to secure material as the week progressed and, as a result, the gap between willing buyers and willing sellers narrowed significantly. The most recent transaction was concluded at, or very near, the most recent uranium spot price. New demand emerged, represented by two non-US utilities entering the market. While current supply remains sufficient to meet demand, the recent increase in the spot uranium price led sellers to marginally raise their offer prices with each new sales opportunity.
Cameco Corp.,(TSE: CCO) has slightly lowered its sales forecast for 2010, dropping its previous guidance for uranium sales this year from a range of 31 million to 33 million to the new guidance of 30 million pounds. The change was attributed to contract deliveries now deferred by some customers until 2011, and the historically lower level of spot market uranium prices this year.
Cameco's Chief Executive Officer, Jerry Grandey is optimistically looking towards longer term future demands as building energy capacity is leading to the biggest growth opportunity for Canadian and global uranium miners in more than three decades.
During the most recent earnings results conference call, Mr. Grandey said, "Meeting China's future electricity demands means deals must be made now to ensure there will be fuel for the country's rapidly expanding reactor fleet. Cameco is well positioned to supply China and other Asian markets into the future." The market has responded positively since the earnings call with the share price appreciating almost 4 percent from $25.54 to the $26.56 range.
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