The trajectory for spot prices in uranium over the past few months has been rather exciting – if you like peaks followed by steep declines.
I have not kept good records, but I know that at the beginning of 2007 I was reading about steep price increases ranging up to about $135-150 (US dollars) per pound on the spot market. These prices were 10-15 times higher than they had been just 5 years before. I cautioned people that there was plenty of uranium in the world and no need to think that such price increases could continue. (See, for example Uranium supplies – virtually unlimited in comparison to demand)
A couple of days ago I checked one of the few places that publishes uranium price information – Ux Consulting Company Nuclear Fuel Price Indicators (Delayed) – and saw a rather dramatic graph in the upper right hand corner. At that time, the delayed price that was being displayed – $85 – was from the week of 24 September. I checked again this morning and saw that the slope had continued during the end of the month of September leading to a spot price as of 1 October of $75 per pound.
Remember, Atomic Insights is not an investment newsletter and certainly not a source of information for commodity trading. I just thought that some of you might like a little update on the market price behavior of a commodity that is important to the nuclear business.
Whenever someone talks about the price of uranium affecting the projected cost of electricity from a nuclear power plant remember just how quickly the spot market price can change – in either direction. Also remember that competent nuclear plant operators employ people who understand this behavior and realize that they generally have months to years to plan and execute the fuel purchases necessary to operate their plants. There is no need for them to buy at the peak – they can always wait a while.