Spot Uranium Price Versus Long Term Uranium Price*
Uranium prices differ dramatically from other commodities and resources such as oil and gas.
While many often reference the spot price of uranium, the long-term price is what really counts.
That’s because less than 15% of uranium is actually traded at spot price. That means more than 85% of uranium is traded in long-term prices.
Take a look, courtesy of UxC and the World Nuclear Association:
(*Note that the Euratom long-term price is the average price of uranium delivered into the EU that year under long term contracts. It is not the price at which long-term contracts are being written in that year.)
So what does that mean?
It means that while the spot price of uranium is what people look at, the long-term price of uranium is what uranium companies rely on.
That’s because uranium doesn’t trade large volumes on a futures exchange, and the spot price of uranium doesn’t actually reflect the actual price of uranium that’s being sold in the market.
Unlike other metals such as copper or nickel, uranium is traded in most cases through contracts negotiated directly between a buyer and a seller. It’s not as easily manipulated on a futures exchange as most other commodities such as gold or silver.
That’s why the real upside to playing uranium is by playing the uranium producers.
Weekly spot uranium prices can also be found at the UxC: http://www.uxc.com/review/uxc_Prices.aspx
*More information can be found from the following report: An Explosive Opportunity in Uranium
