LONDON (Mineweb.com) --Reports from North America suggest that a uranium auction of some 260,000 pounds of U3O8 (yellowcake) has fetched over $70 a pound for the nuclear fuel metal, thus setting a new spot price. The auction was on behalf of U.S. uranium producer Mestena Uranium with operations in Texas.
According to Reuters, Dustin Garrow, the president of ZB Marketing, a consultancy based in Littleton, Colo., facilitated the auction last week that led to the record price.
"I think the next deal we'll see $75 a pound," Mr. Garrow said an interview. He declined to identify the buyer, but said it was made by a "non-utility, non-uranium producer." He has conducted eleven auctions this year for Mestena, selling roughly one million pounds of uranium.
As a result of the auction price achieved, Ux Consulting, which defines spot price data for uranium, set the latest price at $72 a pound – and reports suggest that this may rise further with current demand exceeding supply – and expected to continue to do so for the next year or so.
Meanwhile, well-respected Australian based research organisation Resource Capital Research, which specialises primarily in the uranium sector among other minerals resources, has predicted spot uranium oxide prices rising to $115 a pound during 2007.
According to RCR’s latest quarterly review of the market, analyst John Wilson states: “Forward indicators suggest the uranium price is heading to US$90/lb by mid 2007, an increase of 37% from the current spot price [of $65 an ounce when the report was written]; and US$115/lb by September 2008, an increase of 75% over the current spot price. These price levels are revised up from our September uranium quarterly which indicated a uranium price of US$60/lb (+ 50%) May 2007 and US$88/lb (+31%) by late 2008. The upward revisions are largely driven by the expected impact to the uranium market of delays at the Cigar Lake project (Cameco) in Canada.”
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