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Despite all the hype, uranium industry is looking sick

Uranium Week: Another Broker Downgrades Price Forecasts Ninemsn-Mar 24, 2014 Only four bull-uncertain-uraniumtransactions totalling 500,000lbs of U3O8 equivalent were conducted in the spot uranium market last week. Industry consultant TradeTech notes year to date volumes, at just 7.4mlbs, are down 32% on the same time last year. The ongoing lack of buyer urgency saw TradeTech’s spot price indicator fall another US15c to US$34.60/lb.

Following the closure of Paladin Energy’s Kayelekera mine in Malawi, BA-Merrill Lynch now believes supply from similar new projects in Africa will be shut down for the balance of the decade. Such projects, including Imouraren in Niger, Trekkopje in Namibia and Mkuju River in Tanzania require a long term uranium price well above the broker’s estimate to cover the cost of production. This withdrawal of supply will not upset the balance in the shorter term given the extent of Japan’s stockpiles, Merrills suggests…..

Critical to global demand-supply is the restart of Japanese reactors, progress in which has been slower than the broker expected.

So far 17 of Japan’s 44 idled reactors have applied to the regulator for restart,……

Brokers have long seen the first Japanese restarts as the impetus for the uranium market to overcome its malaise, but even with the first of these in sight a well supplied market has meant little price improvement.

As a result, Merrills has lowered its 2014 spot price forecast by 3.2% ….There were no transactions in the term market last week and TradeTech’s term price indicators remain unchanged at US$37.75/lb (mid) and US$50.00/lb (long)……..http://finance.ninemsn.com.au/article.aspx?id=8819579

March 26, 2014 - Posted by | Uncategorized

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