| Because of rapid developments in the uranium sector, | | | | that matter, at which levels are the floor prices |
| over the past three years, the market place | | | | near-term uranium producers, such as Energy Metals |
| continues attempting to digest all the news and | | | | (NYSE ARCA: EMU), have signed with utilities? Are |
| adjust accordingly. | | | | these at US$85/pound? Or are the floors at higher |
| In a June 2003 utility PowerPoint we recently | | | | prices? Lower prices? How high is the ceiling price? |
| reviewed, it became evident to us that U.S. utilities | | | | We did discover one interesting discrepancy. For |
| were later ambushed by unforeseen developments | | | | momentum traders and those hoping to exploit the |
| then entering the markets. According to the industry | | | | market price inefficiency: TradeTech reports its |
| presentation made by a well-known spokesman of a | | | | uranium price indicator after market on Friday while |
| nuclear utility, he explained to his audience, four years | | | | Ux Consulting does not report its price indicator until |
| ago, "It is difficult to see how very many companies | | | | late Monday. Rarely are these price indicators much |
| could afford to invest in new production when there | | | | different. After all, both talk to mostly the same |
| is such a glut on the supply side." | | | | nuclear buyers and brokers to arrive at their price |
| He added on one slide, "Only those with substantial | | | | indicators. |
| market share, long-term contracts and low production | | | | However, U.S. stock options traders, utilizing a |
| costs can afford to invest in new production in such | | | | company's put and call options series, such as those |
| a market." He also pointed out, during his lecture, the | | | | offered by Cameco Corp (NYSE: CCJ) and Uranerz |
| Russian HEU feed sales 'will overhang the market and | | | | Energy (AMEX: URZ), could possibly benefit by |
| serve to moderate price.' | | | | knowing the uranium price indicator before trading |
| Times have changed. We bring this up not to torture | | | | commences Monday morning, especially after a spot |
| this man's faulty prescience, but to demonstrate how | | | | uranium price spike. Certainly this inefficiency will |
| greatly the uranium market has undergone massive | | | | someday be remedied, but those traders hoping to |
| upheaval in such a short time. The market is still | | | | exploit this unfortunate and archaic market |
| struggling to attain realistic efficiency and | | | | mechanism could potentially reap trading profits. |
| transparency. For nearly four decades the civilian | | | | Summary of Uranium News Services |
| nuclear fuel market had been a closed society. | | | | Each of these news services has varying degrees of |
| According to one interview we conducted a year | | | | 'connection' and credibility within the uranium space. All |
| ago, we were told you could fit all the market | | | | five have their pulse on the uranium price. |
| participants into a StarbucksÂ(R). | | | | Nukem is a subsidiary of a former uranium mining |
| For more than a decade and through 2003, it was a | | | | company, which now specializes in nuclear engineering |
| buyer's market. Buyers dictated prices. Uranium | | | | services, including decommissioning and nuclear waste |
| miners either quietly whined among themselves or | | | | management. Nukem publishes insightful articles about |
| took it on the chin and humbly sold their uranium for | | | | the nuclear sector in the company's monthly Nukem |
| whatever cash the buyer would pay. Over the past | | | | Market Report. Nukem also publishes the month-end |
| two years, sellers have begun dictating floor prices | | | | uranium price indicator. One can visit their website to |
| with only a passing concept of a ceiling price. Just as | | | | find out about their services: A more intensive |
| buyers were relentless prior to 2006, sellers hold all | | | | reporting of the weekly price range comes from a |
| the cards for the next little while. Using TradeTech's | | | | Nukem spin off: Energy Intelligence. This service has |
| long-term contract price of US$85/pound U3O8 | | | | covered the energy markets for decades and is |
| equivalent, new entries to the uranium market have a | | | | widely respected in all sectors they cover. |
| comfortable spread between operating costs and the | | | | As with all Platts publications, Platts Nuclear Fuel is |
| floor price for their uranium sales. | | | | owned by The McGraw-Hill Companies (NYSE: MHP). |
| Still, there remain numerous inefficiencies in the spot | | | | The publication is published every two weeks. Platts |
| uranium pricing market. Probably less than 200 people | | | | publishes a uranium price range, provides penetrating |
| worldwide have a grasp of what is really going on | | | | reportage of the nuclear fuel cycle sector, and |
| within this uranium markets; some might consider this | | | | reports on the uranium price indicators issued by |
| estimate quite generous. Of those, probably far less | | | | TradeTech and Ux Consulting. One can contact Platts |
| than fifty have extremely reliable information. None | | | | by email for additional information or apply for a free |
| of these individuals write uranium mining stock | | | | trial at or by telephone: 212-904-3070. |
| newsletters. | | | | FreshFUEL is published by Washington Nuclear |
| In order to provide uranium mining stock investors, | | | | Corporation. Unlike NYMEX uranium swaps, which are |
| uranium futures traders and others with the tools to | | | | financial-based, this weekly publication reports on |
| capitalize upon these market inefficiencies 'for their | | | | physical uranium actually traded during the week. In |
| own protection,' we compiled a list of valuable news | | | | their May 11th issue, we reviewed a snapshot of the |
| sources from which to draw vital industry data. We | | | | results for New York Nuclear's Wednesday two-hour |
| also provided some commentary about each to help | | | | online trading session through the UraniumOnLine |
| protect yourself against upcoming price volatility in | | | | electronic trading system. FreshFUEL is published 50 |
| this marketplace. | | | | times per year and subscription information can be |
| In our January forecast, we expected some price | | | | obtained by contacting Nancy Passarelli through her |
| volatility in 2007. This remains as true today as it was | | | | email address of or by telephone at 212-682-5070. |
| when we announced it four months ago, especially | | | | In the past, many had recognized Ux Consulting as |
| after we re-read those last four paragraphs we | | | | one of the more widely followed consulting services |
| wrote in that commentary. ( ) | | | | in the uranium space. This company reports a spot |
| Five valuable news services provide a substantial | | | | price indicator to subscribers sometime on Monday |
| amount of 'breaking news' information and/or | | | | afternoon and then publicly releases the same data |
| decision-making insights about uranium pricing. Each | | | | late Tuesday or Wednesday. To our knowledge, Ux |
| have established their own niche in the uranium | | | | Consulting has never issued a month-end U3O8 spot |
| market and have developed a dedicated following. | | | | price unless the weekly spot price coincides with the |
| The 'trade papers' are where many of the | | | | last day of the month. UxConsulting has been in |
| mainstream media visit for sound bites and new | | | | business for about twenty years. The website |
| developments in order to write those articles. | | | | address is |
| At least four of these news services are widely read | | | | NUEXCO/TradeTech has been publishing the weekly |
| by the serious players in the market. These include | | | | spot uranium price continuously for nearly forty |
| utilities, fuel managers, fuel brokers, trading | | | | years. Through the company's weekly magazine |
| companies, governments and market traders (in | | | | Nuclear Market Review, TradeTech publishes a |
| either physical uranium or mining stocks or both). | | | | weekly spot price indicator before midnight eastern |
| With the advent of NYMEX futures trading, the | | | | time on Friday. The company also publishes an |
| uranium market is proceeding through another | | | | end-of-month spot price indicator - even on New |
| paradigm shift. We expect Wall Street players to | | | | Year's Eve (December 31st). Subscribers receive |
| stampede into this sector in increasing numbers as | | | | weekly reports and monthly reports on an annual |
| evidenced by reports from the recent Raymond | | | | subscription. |
| James (NYSE: RJF) Uranium Conference in New York | | | | Until recently, most subscribers for these publications |
| City.( | | | | were comprised of utilities and mining companies. |
| The serious reporting services include: Platts Nuclear | | | | After NYMEX announced it would trade swaps, |
| Fuel, Nukem Market Report, Fresh FUEL (Washington | | | | traders began purchasing annual subscriptions for |
| Nuclear Corporation), Nuclear Market Review | | | | several of these services. Those wishing to remain |
| (TradeTech) and Ux Weekly (Ux Consulting). | | | | on top of the news or ahead of the news should |
| We have come across glaring inefficiencies in the | | | | contact each company and find out about their |
| price-reporting space. For example, there are only | | | | publication offerings. At a time when we believe price |
| two services reporting the month-end price of | | | | volatility could instantly enter this market, it might |
| uranium (more specifically the U3O8 equivalent): | | | | pay to protect oneself by relying on professionals |
| Nukem Market Report and TradeTech's Nuclear | | | | rather than the hearsay of amateurs. We hope this |
| Market Review. | | | | helps level the playing field for many. |
| Another question remains unanswered: Why is there | | | | COPYRIGHT© 2007 by |
| a US$35/pound spread between the long-term | | | | StockInterview, Inc. ALL RIGHTS RESERVED. |
| uranium price and the weekly spot price? And for | | | | |