Uranium Investing News

By Luke Brocki - Exclusive to Uranium Investing News and U3O8.biz

All Hallow’s Eve is upon us, bringing to an end of one of the scariest months in stock market history. The main TSX board clawed back about 5 per cent of losses in mid-week gains, before closing the week 93 points down at 9,762. It’s still down roughly 30 per cent since the beginning of the year, much to the dismay of investors missing chunks of their retirement savings, but the energy sector, at least, seems to be stabilizing.

Spot uranium prices climbed $1 this week to $45 per pound U3O8, according to price publisher Ux Consulting. The move ends a massive slide, marking the first price increase since July. It seems sellers desperate to liquidate have now pawned most of their material on the cheap. Demand is also picking up, which is why spot prices appear to be strengthening. Of course, much is still dependent on the global credit crunch and its continuing repercussions on the markets.

Also according to Ux Consulting, the long-term uranium price has fallen $5 to $70 a pound U3O8, where it’s poised to stay through the end of November. According to Toronto-based brokerage firm Toll Cross Securities, this means most market participants have not yet had an opportunity to respond to the recent weaknesses in spot prices. The company believes the ongoing discrepancies between spot and long-term uranium prices aren’t sustainable. Time will tell in which direction that gap will close.

For now, uranium futures continue to show a gentle positive slope as time goes by: November contracts are worth $45, rising to $46 in December and $50 come March 2009. June 2009 futures are trading at $52, rising to $53 in September 2009 and $54 in December 2009. March 2009 futures are worth $59 a pound U3O8.

Uranium companies are looking good on the Toronto Stock Exchange for the first time in weeks. After a long slide, the Toll Cross Junior Uranium Index jumped 13 per cent to 132.62 from 117.31. Compared to this time last week, junior explorers are up 9 per cent, advanced explorers up 12 per cent, production visibility companies up 15 per cent, and producers up 10 per cent.

In nuclear energy news, power-plant operator Bruce Power wants to build two new nuclear stations in Nanticoke, Ontario, on the site of a coal plant gearing up to shut its doors in 2014. The company has now applied for a site preparation license with the Canadian Nuclear Safety Commission. If the license were accepted, the next step would be a lengthy environmental assessment to figure out the impact of the proposed reactors.

It’ll be interesting to see the politics behind these plans. As it stands, Ontario’s Energy and Infrastructure Minister George Smitherman told the Canadian Press that Bruce Power’s plans for the area don’t bear the approval or support of his provincial government. CP reports Ontario is committed to getting roughly 50 per cent of its energy from nuclear power, but it hasn’t been soliciting proposals for new plants.