Uranium stocks have taken a beating this year but could be set to recover as the spot price stabilises and the change of government in Western Australia opens the door to mining there.
The spot uranium price has steadied at around $US64.50 a pound after it more than doubled last year to a peak of $US136 before sliding to $US55. The recovery is welcome news for the 80-plus uranium hopefuls listed here, while the four producers are also gaining from the drop in the Australian/US dollar.
Uranium’s rapid rise and fall were blamed on speculators as most of it is sold on long-term contracts rather than on the spot market, although some contracts have a component related to the spot price. Uranium is sold directly rather than via a central exchange but a couple of private companies monitor the market and they estimate the contract price at around $US80 a pound...
Warwick Grigor, managing director of research house Far East Capital, believes uranium stocks have been oversold and says the metal stands out among the commodities because all forecasters see a shortage for the next five to 10 years.
“The one sector of the minerals industry which is guaranteed the longest favorable outlook is uranium,” he says. Grigor believes smart investors will be buying now to take advantage of price weakness.
The spot uranium price has steadied at around $US64.50 a pound after it more than doubled last year to a peak of $US136 before sliding to $US55. The recovery is welcome news for the 80-plus uranium hopefuls listed here, while the four producers are also gaining from the drop in the Australian/US dollar.
Uranium’s rapid rise and fall were blamed on speculators as most of it is sold on long-term contracts rather than on the spot market, although some contracts have a component related to the spot price. Uranium is sold directly rather than via a central exchange but a couple of private companies monitor the market and they estimate the contract price at around $US80 a pound...
Warwick Grigor, managing director of research house Far East Capital, believes uranium stocks have been oversold and says the metal stands out among the commodities because all forecasters see a shortage for the next five to 10 years.
“The one sector of the minerals industry which is guaranteed the longest favorable outlook is uranium,” he says. Grigor believes smart investors will be buying now to take advantage of price weakness.
