Sunday, September 03, 2006

Uranium hits $52

It's no surprise to anyone that has studied the fundamentals of the market, but uranium blowing through $5o this week looks phenomenal to the casual observer. Uranium has gone from $7 to $50 a pound in the space of a few years without a single pullback. It has consolidated sideways at times, but has not retraced one penny. I will not say that will continue forever, but I will say that I expect the surprises to continue to be on the up side.

From the site

In the Market ...
The spot uranium market was extremely active in August in spite of expectations for a “summer slowdown.” The highly anticipated results of the US Department of Energy (DOE) auction of 700 mtU as UF6 were released, indicating that the market remains hungry for supply. In addition, the auction of 100 thousand pounds U3O8 was met with aggressive competition from potential buyers. Sellers continue to seek market-related pricing terms for spot delivery. Buyers, in an effort to resist these market-related pricing terms, are accepting higher prices in order to obtain fixed pricing terms as evidenced by the results of this month’s two fixed-price auctions. The buyer mix remains diverse, with utilities, producers, and intermediaries seeking market purchases. Long-term uranium demand remains strong and continues to exert upward pressure on the spot uranium price. Historically, the spot uranium market becomes more active in September and TradeTech expects uranium prices to continue their upward climb through the month.

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