URANIUM PRICE MILESTONE – Long-Term Uranium Prices On The Move

Palisade Research February 10, 2017
Category: Research

Resource investors know that spot uranium prices have been on a tear.

However, astute resource investors know that it’s the recent uptick in long-term prices that really matter. Last week, long-term prices increased from $30/lb to $35/lb, and this is important because 70-80% of uranium is transacted under contracts.

So, what in recent news is driving these long-term contracts higher?

-Traders and intermediaries are buying in anticipation of higher prices

-South Africa has been receiving strong support from companies to help roll out its nuclear power program. Twenty-seven companies, led by China’s SNPTC‚ France’s EDF Energy‚ Russia’s Rusatom Overseas and South Korea’s KEPCO, have stepped up to the plate, submitting information and laying out a long-term strategy. This is great inroads into Africa, which has a limited number of nuclear reactors.

-There were ten reported spot transactions in January 2017 for a total of 1.5M lbs of yellowcake

-At the beginning of February, three addition transactions were reported. One was from a US utility for 4.8M lbs to be delivered between 2023-2030. Second, was a non-US utility purchased more than 6m lbs for delivery from 2018-2027. Lastly, an undisclosed buyer purchased U3O5 for deliver during 2020-2022 period

Activity in this once sleepy sector is picking up, and we recently outlined five reasons why a major uranium bull market is on the horizon. In the same write-up, we also announced our Top 3 Uranium Picks for 2017. These stocks have been on fire, but it is certainly just the beginning.

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