Spot uranium falls to $49/lb

Analysts say further price slippage is possible

By Tom Stundza -- Purchasing, 10/8/2008 11:30:00 AM

The spot price for uranium, used to fuel nuclear reactors, fell below $50/lb this week and it could ease further, traders and analysts tell the Reuters News Service.

That takes the price to $49/lb, the lowest level since August 2006. Uranium has shed more than two- thirds of its value since it hit a record $136 in June last year, according to Ux Consulting (UxC), a leading publisher of uranium prices.

Analyst Max Layton at Macquarie Bank in London tells clients that reactor fuel buyers were paying around $40-45 a pound for their material on long-term contracts, so picking up spot uranium for the same amount would be a good deal. “On a medium to long term view $40-45 a pound spot prices are very good buying, but in an illiquid spot market where there is set to be more sellers than buyers in the short term the price could easily overshoot,” he writes.