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Daily uranium spot price tumbles to $18.75/lb, lowest since 2004

The daily spot price of uranium at the end of Monday trading was $18.75/lb U308, down $1.25 week on week and the lowest daily price since around mid-2004, with buyers and sellers continuing to conclude deals at progressively lower prices, as they have since mid-October, sources said.

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The price is 45.2% below the $34.10/lb daily spot price that price reporting company TradeTech reported January 1. The price reported Monday is down 15.7% since October 14, when TradeTech put the price at $22.25/lb. Since September 1, when TradeTech reported a U3O8 daily spot price of $25.50/lb, it has tumbled 26.5%.

The price slide was spurred by talk among participants at the Nuclear Energy Institute's October 17-19 International Uranium Fuel Seminar in Naples, Florida, that "there are several million pounds that need to be placed by year end," one market source said Friday.

"This made people uneasy, especially the traders," he said, adding: "The feeling was, among them, that they'd better be aggressive enough on price to place material, because the supply may outstrip demand."

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"This led the price down and is still doing so. This is the psychological factor that's come into play," he said.

A second market source said: "There's some talk about looming utility buying, but whatever demand there is, is very weak. You'll see the bid prices continuing down, and the ask price will follow the bids down."

TradeTech, in a report Monday, said: "Sellers are facing a rise in financial pressure and the need to generate cash, along with year-end sales objectives."

"Utilities are generally well covered in the near term and unwilling to make purchase commitments without an adequate price incentive. As a result, sellers are faced with holding inventory or slashing prices in order to conclude sales," it said.

Another factor depressing the spot price, according to sources, is the continuing abundance of material available for sale. TradeTech said on Monday there was 4.4 million lb U3O8 "available for sale" and 2.7 million lb of "inquiries to purchase" material.

A third source interviewed Friday said U3O8 supplies are being inflated by fourth-quarter transfers of US-owned uranium to private contractors in lieu of payment to clean up the US Department of Energy's now-shuttered Paducah and Portsmouth gaseous diffusion uranium enrichment plants.

Under a secretarial determination, DOE can transfer up to 900 mt, or just under 2 million lb, of the material in Q4. The contractors monetize the U3O8 received from DOE by placing the material with commodity trading firms that sell the U3O8, generally on the spot market.

"When you have this much material coming up against a very limited demand, there's no surprise that the spot price keeps falling," this source said in an October 20 interview.

TradeTech on Friday reported a $19.75/lb weekly spot price, down 25 cents from October 21.

Its fellow price reporting company Ux Consulting's market report for the week that ended Monday put the weekly spot price at $18.75/lb, down $1.25 week on week.

Ux reported a Broker Average Price Monday of $18.81/lb, down 78 cents compared with Friday. It said the bid-offer spread on Monday was $18.50/lb-$19.12/lb, with the bid down 88 cents and the offer down 68 cents. The BAP is based on information from Evolution Markets and Numerco Ltd., according to Ux.

Friday's Platts Nuclear Fuel range for the week is $19/lb-$20/lb.

--Jim Ostroff, james.ostroff@spglobal.com
--Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com