Globe and Mail – Uranium is a hot metal.
It is so hot that hedge funds have become active players in the market, according to Ux Consulting Co. LLC, a Georgia-based uranium industry trade publication.
The spot price has more than quadrupled since 2002, climbing in early June to $44 (U.S.) a pound — surpassing a peak set 28 years ago. This week uranium traded around $47.25 a pound.
The hedge fund group accounted for just over 25 per cent of the total 2005 spot volume, but even without this group’s participation, market activity last year would have set a 10-year volume record, adding upward pressure on the spot price, Ux Consulting said.
In the long run that could be good news for Saskatoon-based Cameco Corp., which is scheduled to report its second-quarter results today.
But for now, the world’s largest uranium producer and operator of 38 per cent of the Western world’s uranium conversion capacity is being paid less than half the spot price for the uranium it sells.
Nevertheless, shares of the company have more than quadrupled in price during the past 26 months, closing yesterday at $44.16 (Canadian) on the S&P/TSX.
