U3O8 spot price hits 14-month high due to tightening of supply

Uranium spot prices have reached a 14-month high due to tightening supply stemming from rumored purchases by a new Swiss physical uranium fund and potential sanctions on Russian supply, market participants said June 13.

Platts assessed the current month U3O8 spot price to Canada at 1 pm ET June 13 at $57.60/lb, up 75 cents/lb from the June 9 assessment of $56.85/lb. That is $7.75/lb, or 15.5%, higher than the $49.85/lb price assessed a year earlier.

The spot price has steadily increased since Jan. 3, beginning at $48.50/lb and climbing to $53.25/lb April 25, at the time the highest price assessed by Platts since Sept. 1 when it hit $53.15/lb.

Price increases accelerated after the World Nuclear Fuel Market conference in Slovenia June 4-6, a market source said June 13. The source said that positive conference activity paired with growing interest on the recently launched Swiss physical uranium fund, Zuri-Invest AG, and a tightening of supply led to the jump in price. The expectation for fund purchases over the following weeks have sustained the high prices, the source said.

In the last two weeks, Zuri-Invest has been rumored to have purchased 800,000 lb, but the fund has not publicly stated whether it participated in the transactions. The fund announced March 27 it planned to launch a $100 million physical uranium fund using an actively managed certificate, or AMC, investment vehicle.

Zuri-Invest is not publicly traded, is limited to European investors and requires a minimum $100,000 initial stake, according to the company's website.

"The market saw Zuri coming and decided to buy before the price rises as the fund makes purchases," the source said. It added, "This is part of the reason the price started to move."

"We're at that inflection point where supply is not overly available in the spot market," the market source said. "This combined with the market's reaction to the fund led to the price continually rising," the source added.

"I don't know if there is one particular event or concern that is driving this, but ... an overall optimism about the future of nuclear and combined with potential for US sanctions against Russia are the main factors driving the rise in price," a uranium producer said June 13.

"Those two things together ... are going to feed off each other and just continue to drive the price higher," the producer said.