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Uranium price – even further down the drain!

text-uranium-hypeNuclear power market still suffers from Japan’s Fukushima disaster -5-year disaster anniversary shows little nuclear power progress in Japan  Market Watch, By MYRAP. SAEFONG MARKETS/COMMODITIES REPORTER 11 MAR 16  “……“Unfortunately, the uranium [and] nuclear market is still suffering significantly as a result of the Fukushima aftereffects,” said Jonathan Hinze, executive vice president of international operations at the Ux Consulting Company, the world’s leading nuclear-fuel consultancy.

In the wake of the nuclear accident, nuclear power became somewhat of an outcast……

Uranium supply ‘overhang’  Back in September, Jim Ostroff, senior editor of Platts Nuclear Publications, estimated that Japanese utilities had around 120 million pounds of uranium stockpiled, which was likely enough to have supplied all of Japan’s pre-Fukushima needs for six years.

Today, there remains an “overhang of excess supply to demand,” he said.

With such few active reactors, the Japanese are not buying uranium to make nuclear fuel and the companies that make the fuel from uranium, known as converters, are selling excess amounts because prices are so low, said Ostroff.

“With little, if any, demand to purchase [uranium] right now on the spot market, utilities are leery to buy any material because they are looking for a bottom” in prices, he said.

As of March 7, weekly spot uranium prices stood at $31.10 a pound, down from the March 7, 2011 weekly price of $66.50, according to data from UxC Consulting. UxC uranium futures UXM6, -1.60%  are traded on Globex, with the June contract at $29 Friday, but volume is small.

The “bottom is falling out on prices again,” said Ostroff, noting that daily spot prices had stabilized at around $34.75 a pound earlier this year before its recent retreat.

In response to the low prices, it’s “fair to say that most of the world’s producers have abandoned any expansion plans and have curtailed their existing operations,” said Ostroff.

Year to date, shares of uranium producer Cameco Corp. CCJ, +2.69%  has lost around 2.5%, while the Global X Uranium exchange-traded fund URA, +1.96%  is down about 3.5%. But the losses pale in comparison to last year’s declines of nearly 25% for Cameco shares and more than 38% for the ETF……..http://www.marketwatch.com/story/nuclear-power-market-still-suffers-from-japans-fukushima-disaster-2016-03-11

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March 12, 2016 - Posted by | business and costs

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