We have dueling headlines, an insightful story and a reminder.
From Bloomberg via the Globe and Mail:
Oversupply sinks price of uranium
Uranium tumbled 14 per cent last week as supply exceeded demand and the U.S. Department of Energy prepared to sell inventories of the metal used to fuel nuclear reactors, said industry pricing service Ux Consulting Co. LLC.
The radioactive metal fell $15 (U.S.) to $90 a pound, Roswell, Ga.-based Ux said Monday in its Ux Weekly report. The decline is the biggest ever recorded by Ux. The price of uranium for immediate delivery has dropped 35 per cent since trading at a record $138 a pound in June.
"Maybe in the fourth quarter we'd look for uranium to move up, but it could head lower before it goes higher," Glyn Lawcock, head of resources research at UBS AG in Sydney, said yesterday, adding he is "surprised" at the extent of the drop.
In a must read story from the Telegraph:
Do freight rates tell the true story?
The focus has been on the credit crunch but the Baltic Index may give a better picture of the state of the world economy, writes Ambrose Evans-Pritchard
The cost of leasing cargo ships to carry coal and metal to China reached an all-time high this week, defiantly ignoring a month of panic and tumbling prices across the commodity markets....
...If he is right, uranium may soon be ready for a rebound after slumping from $136 a pound in June to $90 as hedge funds dumped their 25m-pound stash and Japan shut down the Kashiwazaki-Kariwa nuclear plant after the latest earthquake.
"We like uranium," said Michael Lewis, head of commodity research at Deutsche Bank. "A lot of reactors are being built and there's a fundamental tightness coming back into the market,"
China aims to build 30 nuclear plants over the next 15 years.
India is planning 19 and Russia is switching a quarter of its energy supply to nuclear power, despite Chernobyl scars.
The US is at last getting over its nuclear allergy after Three Mile Island, sketching in 17 plants over the next six years.
In total, there are 76 reactors on drawing boards worldwide - and uranium is scarce.
Mind you, uranium was just $7 a pound in 2001. Copper, lead, nickel and zinc were seven times cheaper. They have a very long way to fall if the world economy slips into a full-blown recession on anything like the scale of the dotcom bust.
Read the whole story. Do Not forget this announcement:DOE TO SELL UP TO 200 METRIC TONS URANIUM HEXAFLUORIDE
...Proposals are due August 17, 2007; the anticipated award date of the Sales Agreement is August 31, 2007. This solicitation is for full and open competition, with full payments for the eight lots of uranium due on September 21, 2007.