#uranium - All is not well in the spot market! 3 issues:
1. By my numbers, Cameco was 40% of all spot buying in Q1.
2. The headline spot price everyone is getting excited about is the price for delivery at Cameco's converter but the price for delivery at the other major
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1. By my numbers, Cameco was 40% of all spot buying in Q1.
2. The headline spot price everyone is getting excited about is the price for delivery at Cameco's converter but the price for delivery at the other major
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converters has not moved as much. Price at Converdyn or Orano is US$3.50-4.00/lb lower. Thats highly unusual. I've never seen an arbitrage of more than 25-50c between major converter delivery locations.
3. The forward curve has flattened markedly, ie, the 12 and 24 month
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3. The forward curve has flattened markedly, ie, the 12 and 24 month
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prices are not moving up as quickly as the front month (where Cameco buying is concentrated).
...all this tells me the spot price has ONLY moved over US$30/lb due to Cameco buying. Admirable work by Cameco but they're now in a bind. They need US$40-45/lb+ to restart their
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...all this tells me the spot price has ONLY moved over US$30/lb due to Cameco buying. Admirable work by Cameco but they're now in a bind. They need US$40-45/lb+ to restart their
(3/4)
mines, which will require more of an effort... what if utilities continue to hold back?... can Cameco muster the resources to punch through US$40/lb?... or does the price fall back?
...some musings. We're fairly defensively positioned at the OAM Uranium Opportunity fund!
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...some musings. We're fairly defensively positioned at the OAM Uranium Opportunity fund!
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