Despite some of the world’s biggest economies falling into recessions, uranium bulls continue to press that the metal may have found price bottom. Uranium prices continue to creep upward, fuelled by higher demand and lower supply in the form of troubling news from producers. Price publisher Tradetech indicates the spot price now hovers around US$48, after posting a US$2-increase last week, driven by six transactions concluded at current price levels.
Spot uranium prices climbed another US$1 this week to US$46 a pound U3O8, according to price publisher Ux Consulting. That’s the second straight rise of $1 in as many weeks. Spot uranium snapped a long and steep decline last week, as interest from utilities returned and India got ready to place orders for uranium, thus boosting demand for the radioactive metal.
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% of losses in mid-week gains, before closing the week 93 points down at 9,762. It’s still down roughly 30% 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.
After what seemed like an eternity in freefall, the spot uranium price finally held firm at US$45 a pound U3O8 this week, according to price publisher Tradetech. In fact, rival publisher Ux Consulting even bumped its price up US$1 to match Tradetech’s estimate. According to Tradetech, the massive sell-off was fuelled by-surprise, surprise-the global credit crisis. Investors and hedge funds have been major buyers in the spot uranium market in recent years, but tough financial times forced them to clear out their inventories on a quest for liquidity.
Global financial uncertainty continued to trickle into the uranium market last week, prompting a further drop in spot uranium prices and the indefinite closure of a major uranium mining operation in South Africa.
Bargain uranium continued to attract buying interest in the sector last week, but whatever material changed hands wasn’t enough to firm falling spot prices. And while uranium bulls continued circling the sector, others, such as RBC Capital Markets, made widespread cuts to their uranium price forecasts, expecting slowing growth in China and a global recession to move metal markets into surpluses as early as 2009.
Tuesday was a day of mixed blessings for uranium investors. On the one hand, energy stocks soared across the board on the TSX, uranium being no exception. But the stock rally followed a dismal week of trading and more uncertainty is expected as investors feel out the state of the global economy. And that uncertainty continues to weigh down spot uranium prices, which dropped to a low unseen in nearly three years.
The wild stock market ride continued Wednesday, fuelled by mixed responses to another bailout package for beleaguered banks-this time in the UK-and simultaneous interest rate cuts in Canada and the United States. North American markets behaved like bipolar patients fresh out of mood stabilizers; Toronto’s S&P/TSX composite opened down more than 300 points, quickly rallied to get more than 200 points back, then lost some 250 points, then gained… well, you get the idea. It was a wild ride.
Despite U.S. Congressional approval of a US$700-billion bailout package for Wall Street banks last week, stock exchanges the world over saw some of the worst performances in years. Investor reactions were mixed after the rescue package was signed into law and questions about the future of the American economy continued to drag down global markets.
Bargain-hunters shouldered their way into the markets Tuesday to snap up oversold stocks of all kinds, one day after the U.S. House of Representatives rejected a proposed $700-billion bailout package and sent global equity and commodity markets spiraling into oblivion. Just the same, massive financial uncertainty has affected spot uranium prices, which plunged US$5 to US$55 a pound U3O8 according to price publisher Tradetech (rival publisher Ux Consulting reported a similar US$5-drop to a price of US$53 a pound).
Monday, November 17, 2008
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