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NY Times Blog on the High Uranium Prices

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Stephen Dubner at the New York Times' Freakonomics blog explained some of the reasons for the high uranium spot prices seen over the past several years.
Between 2004 and 2007, the spot price of uranium more than quadrupled, reaching more than $140 before falling off sharply in the past several months to less than $80.

...

According to David Miller, C.O.O. of Strathmore Minerals, nuclear plants had, until recently, been living off a huge uranium stockpile from the 1980’s. That stockpile was created in anticipation of an onslaught of new U.S. nuclear plants that ended up never being built because of Jane Fonda political, regulatory, and public pressures. Now, says Miller, with that stockpile depleted, there’s a huge push for new uranium.
What's great about this post is that George Bell (CEO and Chairman of UNOR Inc.) jumped in on the comments:
As the CEO of the Canadian uranium exploration company UNOR, Inc - 19.5% owned by the largest uranium producer in the world, Cameco - I feel it necessary to help clear the air on this issue.

First, there are two components to the uranium process: The long-term price and the spot price. When enrichers and reactors run into a near-term supply crunch, they must go to the spot market. However, most enrichment facilities and reactor end users buy at long term prices.

...

The spot price of uranium has been falling over the past few months, but this is because most buyers are locking in at the long-term price, which is presently $95 per pound of U308. Behind the smokescreen, savvy insiders know that that the spot price is falling, because no one is buying at the spot price. Really, industry insiders know, enrichers and reactors are buying at the long-term price, because they know the price is going up, based on supply/demand issues alone.

The spot price will reflect such in the future, but for now, it is sort of a “smoke and mirrors” as to what is really happening within the industry.
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