Spot Uranium Prices See First Big Movement in Months

After months of sideways movement, TradeTech’s weekly uranium price indicator surged by 3% last week, rising to $20.60 per lb.

While 3% may not seem to be a large enough movement to call it a rally; it comes after spot uranium prices have traded only slightly higher for the past few months, running into resistance at $20 per lb. time and time again. Spot uranium prices actually closed higher for seven-straight weeks, but the week-over-week movement was so modest that all the advances only added up to a 4.3% increase in uranium’s value. Relatively, this makes 3% a significant movement for one week.

The climb in uranium was achieved even though only four transactions totaling 600,000/lbs U3O8 equivalent took place, according to industry consultant TradeTech. Both utilities and traders participated on the buy side while producers and traders were sell-side participants.

No trades took place in term markets which left term price indicators unchanged at $24.45 per lb (mid) and $34.00 per lb (long).

Spot uranium’s price movement has disappointed so far this year. Prices rallied earlier in the year after Kazakhstan announcement a big production cut, but these gains faded.

There was no reason for the reversal, just like there appears to be no concrete reason for last week’s rally. The long-term demand outlook for uranium continues to be robust, and its bull case improves week after week.

The major market news so far this week was an agreement between China and Pakistan to cooperate together when it comes to nuclear power, and part of this cooperation will include uranium exploration. This has brought to the forefront that China realizes the necessity of securing more uranium over the long-run even though right now the market is awash with supply.

Leia Toovey has a B.Sc. in geology from Simon Fraser University, and her degree had a focus on resource economics. Out of school, she started working in the booming mining industry of Vancouver, Canada, covering junior mining stocks and commodities including potash, copper, nickel, oil and gold. Then she moved to New York and worked as a commodities analyst covering a breadth of commodities, from the Baltic Dry Index through the softs. As a geologist she has a greater understanding of the exploration and extraction side of commodities, and how changes in technology and the depletion of resources impact pricing. At Economic Calendar she covers a variety of commodities, providing daily technical and fundamental analysis and assessing major market developments.