Recent trading in the uranium market shows more buyers are expecting prices to rise. Uranium miner Paladin Energy chief executive John Borshoff noted a shift to long term contract buying while announcing a jump in the quarterly sales revenue and production. A move from spot buying to long term contracts indicates buyers want to lock in current prices because they expect the value of uranium to increase. The term contracting market exceeded 80 million pounds of uranium oxide in 2014, up from 20 million pounds in 2013, Mr Borshoff said.
The majority of the long term agreements involved non-US utilities, which were predominately located in the Asia Pacific region, he said. Global uranium production is also expected to have fallen as low as 145 million pounds in 2014, from the previous year some 155 million pounds, further supporting a price rise. The uranium price plunged in the wake of the Fukushima nuclear disaster in Japan in 2011. Prices were volatile in the final three months of 2014, having jumped from US28.10 a pound in mid-2014 to US44 by mid-November, before sliding back to US35.50.
The Australian Bureau of Resources and Energy Economics is predicting a stronger average uranium price in 2015 of US39.50, and continued rises on the back of growing demand in China and Japan. Paladin sales revenue of US69.9 million -A75.63 million- in the December quarter was up 79 per cent from the same period a year ago. Production was up 27 per cent to 1.3 million pounds at its Langer Heinrich mine in Namibia, with an average selling price of US36.58 a pound. Through various cost cutting measures they are now enjoying significant benefits from just a marginal rise in the uranium price, he said.
Original URL: https://www.sbs.com.au/news/uranium-buyers-expect-prices-to-rise
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