Tuesday, March 8, 2011

Forget $100 oil. $100 uranium is a real problem (CCJ; UUU.tsx; GE; URA)

From Fortune:
Just after Christmas, the container ship Altona, bound for China and carrying a load of 770,000 pounds of uranium concentrate (also known as yellowcake, the transportable form of uranium that will eventually be processed into nuclear fuel), ran into a storm in the South Pacific, between Hawaii and the Midway Islands. After three days of gales and heaving seas, the crew discovered that the containers in the hold had shifted and two drums of yellowcake had been smashed open. There was loose uranium in the hold.

The ship returned to British Columbia, and Canadian mining giant Cameco (CCJ) --which was delivering the processed uranium to a Chinese utility in Zhangjiang -- assured the world press there was never any serious danger of the uranium leaking into the sea, or harming the crew. The Altona berthed at Vancouver before transferring up the coast to a Cameco plant for clean-up.

While the incident sparked little outcry, it's an apt symbol for the unsettled waters into which the nuclear-power industry is sailing. Supplies of uranium, which has been in surplus since the fall of the Soviet Union, are beginning to tighten, and prices are rising again after plummeting during the world financial crisis of 2008-09.

Uranium hit a three-year high of $73 a pound on the spot market at the beginning of February, and there are predictions that it could go much, much higher: a pair of analysts at CRU Group, a commodities and minerals analysis and consulting firm, said in a recent report that prices over the next decade could challenge the all-time high of $136/lb., set in the pre-crash days of 2007....MORE
The metal has just about doubled off its lows of last summer, the futures trade by appointment on the NYMEX, here's the chart from UxConsulting:

Like our old friends, the lard/grease/tallow complex, most of the action is in the spot market.
UxC publishes those prices for their subscribers.
Recent posts:
General Electric Asset Management Buying Uranium Producer's Shares Open Market (GE; PDN.asx)
Uranium Prices Surge on China's $511 Billion Investment in Nukes (BHP; CCJ
"Analyst: This Time, Uranium Demand Is for Real" and The Reformed Broker's Uranium Bet (CCJ; PDN.tsx,asx; URA)