uranium price drops 6%
Uranium Price Drops 6% as Trading Volume Dwindles (Update1)
By Yuriy Humber
Jan. 21 (Bloomberg) -- Uranium dropped 5.6 percent last week as sellers cut prices to generate business after trading volumes in 2007 fell to their lowest in a decade.
Uranium-oxide concentrate for immediate delivery declined $5 to $84 a pound, Denver-based pricing service TradeTech LLC said in a weekly report published Jan. 18. Two sales totaling the equivalent of 200,000 pounds of oxide, used to make fuel for nuclear power plants, were concluded last week.
``After weeks of little or no activity, one seller decided to adopt a more aggressive approach offering uranium at deeply discounted prices in an effort to attract buyers,'' TradeTech said. The efforts were ``moderately successful'' in a market where ``supply is ample to meet current requirements,'' it said.
Energy Resources of Australia Ltd., which supplies a 10th of the world's mined uranium, said last week that 2007 output was the second-highest on record. Supply on the spot market more than twice exceeded demand last week.
Disruption at mines run by Saskatoon, Saskatchewan-based Cameco helped propel the metal to a record $138 a pound in June. The price then tumbled about 45 percent before rallying in October, rising as high as $93 a pound at the end of that month.
``The exuberance of when the physical market was at $135, $138 means people are a bit more sensible,'' Warwick Grigor, managing director of Far East Capital Ltd., said by phone in Sydney. This year, ``most of the producers will be in a heavy surplus. People are taking advantage of that.''
African Accord
Paladin Resources Ltd., an Australian company that said in October it had start-up problems for a plant in Namibia, reported last week that output for the second half exceeded its own forecasts.
Areva SA, the French builder of nuclear reactors, last week ended a rift with the Niger government to sign a new price accord that also allows the company to begin operations at a new deposit. The Imouraren uranium deposit could be the world's second-largest untapped source of the metal, Areva said Jan. 13.
All 14 uranium mining stocks monitored by Bloomberg fell today as equities plunged worldwide and U.S. index futures dropped.
Cameco, the world's biggest uranium-oxide producer, fell as much as 8.9 percent in Toronto and traded at more than a two-year low of C$335 at 11:12 a.m. local time. Uranium One Inc., which is developing South Africa's biggest deposit of the metal, slid as much as 12 percent to C$6.60 in Toronto, the lowest since August 2006.
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