Peter Ker reports that events of the past month have some investors wondering if the bottom, and perhaps the start of the revival, have been found. After falling below US29 dollars per pound in May, the spot price for uranium has since enjoyed a series of incremental rises, and reached US33 dollars per pound earlier this week. Shares in Paladin Energy, Australia's biggest-producing uranium pure-play and the stock most attached to movements in the uranium price, have risen by 50 per cent since late June. There appears to be a collection of factors behind the recent price rise. Numerous mines have been forced to close under the low prices, including the Honeymoon mine in South Australia. Strikes have also temporarily closed some other mines, including the world biggest in Canada, which is owned by Cameco.
There are also suspicions that a program to convert military-grade uranium in Russia into civilian power may have been interrupted by the recent conflict in Ukraine, further denting the supply picture and improving prices. But UBS commodities analyst Daniel Morgan warned optimists that interruptions to supply should not be confused with increases in demand. Morgan indicates that there has been a few supply-side issues which has been enough for a very modest price rise. What the market really needs is a demand-side driver to get the price to rise. But Paladin managing director, John Borshoff, believes there could be more to the story.
Original URL: https://www.smh.com.au/business/uranium-showing-signs-of-postfukushima-revival-20140903-10bzpa.html
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