Uranium Exploration (U3O8)

[fazoolius]

Uranium slumps 14% on excess supply, auction


Uranium tumbled 14% last week as supply beat demand and the US Department of Energy prepared to sell inventories of the metal used to fuel nuclear reactors, said industry pricing service Ux Consulting LLC.

Uranium for immediate delivery fell US$15 to US$90/lb, Roswell, Georgia-based Ux said on Monday in its Ux Weekly report.

The weekly decline is the biggest-ever recorded by Ux.

The price has dropped 35% since trading at a record US$138/lb in June.

Glyn Lawcock, head of resources research at UBS AG in Sydney, said he was “surprised” at the extent of the drop.

“Maybe in the fourth quarter we`d look for uranium to move up, but it could head lower before it goes higher,`` he said on Tuesday in a telephone interview.

Record prices have spurred increased supplies since the first half, when there was a shortfall. Current supplies of uranium oxide concentrate, or yellowcake, are five times demand, consulting company TradeTech LLC said July 27.

The Department of Energy stopped collecting bids last week for an auction of 200 t of uranium hexafluoride, a processed form of the metal equivalent to 519,000 lbs of yellowcake.

“The activity surrounding this event has had noted impacts on analyst predictions, and in turn, on participants` perceptions of how this market could move,`` Ux said its report.