Lawrence Williams blogs that uranium has been one of the best performing commodities over the past year, but only because it was rising from such a low level. So now what lies ahead? While the uranium price may well have been one of the best performing over the past nine months or so, it should be remembered that this is as a recovery from an all-time low price in real terms, but then such times may well prove to have provided the best opportunity to get back into the commodity. Thus the uranium round table panel event at the London 121 Mining Investment conference was well attended as investment professionals sought to get a handle on the latest prospects for the nuclear metal. It is worth recalling that the price reached an all-time high at a time when lack of investment in new projects, together with rundown user inventories, created a huge supply/demand imbalance price spike in 2007 to reach around 135 dollars per lb albeit briefly as is the nature of price bubbles of this type. So the spike was short-lived and then the price was brought down much further as a direct result of the Fukushima Daiichi nuclear power plant tsunami disaster of March 2011, and subsequent shut down of the Japanese nuclear power industry - which is only now beginning to be resurrected - and fear-driven knee-jerk reaction leading to curtailment of nuclear investment programs and reactor shutdowns in Germany, for example. Since then, despite long-term fundamentals looking positive, the price continued to decline, a decline which was exacerbated by the weak resource sector in general, reaching what the sector hopes was its nadir in the middle of last year when it fell down to U.S.28.24 dollars per lb. From this low point it has since recovered to 39 dollars per lb, hence the star short-term performance, but from an extremely low interim level. It should be remembered that most uranium is sold on long-term contracts at prices related to, but often nowhere near, the actual spot price.
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