The spot market price for uranium ended 2010 at its highest level for over two years, reversing a declining trend in a year that also saw record spot market activity.
The year-end price of $62.00 per pound U3O8 reported by uranium market information specialist TradeTech was the highest value reported since September 2008. At the beginning of 2010 the spot price stood at $44.50 per pound, and had been declining since 2008 in line with the global financial crisis. It reached an annual low of $40.50 at the end of February, before prices began to strengthen and the decline was reversed. In November, the spot price rose above $60 per pound for the first time since August 2008.
As well as an increasing spot price, 2010 also saw record activity on the uranium spot market with an annual sales volume of 42.8 million pounds. The spot market has not seen activity close to this level since 1990, when spot market sales reached 40.6 million pounds. Record sales volumes were reported in December, which TradeTech said was due to Chinese nuclear power expansion plans and the signing of two new contracts for long-term uranium supply exciting renewed interest from the financial and investment sectors.
The uranium spot market applies to marginal trading from day to day, although most nuclear utilities secure their uranium supplies directly from uranium producers under individually negotiated long-term contracts. The structure of long-term contracts can vary enormously, and as the contracts are arranged privately between the buyer and seller, the full details and prices are not usually made public. Less than 20% of the world's uranium supplies are traded on the spot market, rather than under long term contracts, but the price in long-term contracts is often related to the spot price at the time of delivery.
Researched and written
by World Nuclear News