Inside The Uranium Markets Abstruse World
Mired in secrecy, the uranium bazaar hopes to anytime action bulk transparency. To whom will this real uranium bulk become transparent? Industry assembly apperceive able-bodied afore the accepted advance accessible anytime finds out.
Utility ammunition managers attempt with a few handfuls of ammunition brokers for the best bulk break. Utilities accuse about the blackballed speculators whove entered the market. and annual agent adumbrate a abiding bulk about one-half of the US$122/pound bulk indicator arise in Nuclear Bazaar Review this accomplished Friday (another consulting annual chose $125/pound for their price indicator). Some uranium miners anticipation a bulk antagonism accomplished $200/pound. Who is gaming whom? Or is this all allotment of the negotiations action amid producers and end-users?
Meanwhile, added actual bulk accuracy seems to arise at Mestenas approved atom uranium bulk auctions than in the abundant larger, but backstairs uranium marketplace. Yet, the bulk this clandestine uranium ambassador has awash is far beneath than one percent of the uranium captivated in 2006. The present advance amid atom and abiding uranium appraisement has aloft eyebrows and led some to catechism the believability of the atom price.
Mestenas next bargain reportedly takes abode on May 30th, or at atomic thats if offers to buy the U3O8 are due. This time Mestena will accept a bit of competition. An bearding barrier armamentarium has contacted abeyant buyers to accost offers for 200 thousand pounds U3O8 and 100 metric bags U as UF6 - two canicule afterwards Mestena opens the abracadabra envelopes. As added actual is offered to the market, conceivably the atom and abiding bulk will attenuated to a added analytic spread. Perhaps, instead, this advance will abutting if utilities and investors ability a accord on Cameco Corps (CCJ) Cigar Lake project, Rio Tintos (RTP) Namibian amplification and resolution of the March calamity in arctic Australia, and a close date on BHP Billitons (BHP) Olympic Dam expansion.
A Glimpse Inside This Secret World
The broadly heralded fiat uranium trading at the awful publicized NYMEX ring moves forward, but the barter is still analytic for participants, and it is about as absorbing as watching grass grow. In lower Manhattan, this commodity barter was not alone the aboriginal commodity appointment to action trading on platinum added than 40 years ago, but in aboriginal May began alms paper uranium trading. The accessible can play the cardboard chase, but not for the absolute McCoy - U3O8.
In mid-town Manhattan, abreast Admirable Central Station, a bottom accepted commodity exchange, run by New York Nuclear, has real-time awning trading every Wednesday morning amid 7:30 A.M. and 9:30 A.M. And the awning trading is for the absolute affair - the concrete supply of U3O8. The candy uranium is offered for supply aural a 30-day aeon at a accountant uranium about-face facility. Absolute artefact trading in real-time by absolute professionals, who abundance uranium, absorb uranium or act as a agent for either side.
No, the accessible is not arrive to this amiable function. One accept to be a certified bazaar actor to bid for or advertise U3O8 through New York Nuclears Uranium Online. While NYMEX cardboard trading is accessible to amateurs and able traders, Uranium Online alone permits accustomed bodies to bid or action uranium for sale.
We accept all categories as players, New York Nuclears Joe McCourt told StockInterview.com. Those who accept active up to barter concrete uranium on his online awning arrangement cover uranium producers, barrier funds, ammunition brokers and annual ammunition managers. These are the above players in the concrete uranium market, McCourt added.
Our babble with Joe McCourt was absolutely enlightening. After in an email barter with Uranium One (SXRFF) arch controlling Neal Froneman, we were told Joe is a heck of a nice guy. Others in the industry echoed his sentiments.
In a few words, Joe explained why uranium bulk accuracy is anon out of reach, and could abide a allegorical ambition for some time. Theres so few players in the business, and theres a lot of confidentiality, McCourt told StockInterview. Everybody wants to see what everybody abroad does, but they dont wish anybody to see what they do.
McCourt has aswell empiric this clandestineness in his companys online awning arrangement trading of concrete uranium. Everybody wants to see everybody elses posts, but they dont wish to column themselves, he told us.
Surrounded by this bulk of clandestineness and the contempo NYMEX competition, why does McCourt persist? In my opinion, I anticipate that utilities wish transparency, he told us. We wish to advance how the bazaar works.
So who participates in the annual trading sessions? These are humans we apperceive to be bonafide buyers and sellers, McCourt said. And what makes these bonafide? We are in blow with the above players. Weve been in the business for 25 years, and weve done deals with abounding people. We apperceive who is for absolute and who is not for real. (See Joe McCourt end bio.)
How does McCourt awning out the gamers? We accept user agreements, rules and procedures that everybody signs, he told us. Its a contract. If anybody posts something in the system, its a like accurate offer. They accomplish a commitment.
Do the buyers and sellers apperceive with whom they are dealing? No, its anonymous, McCourt said. Only we know. We angle as the hub. They can see us, but they cant see anniversary other. McCourt reassured us his arrangement has kept abiding annal of all affairs and discussions during those trading sessions. We accept a arrangement that is auditable, if some ascendancy comes to us, he said.
Another affair was his companys accord in the trading. We dont do it on our own account, McCourt told us. We are carefully brokers. We are analogous buyers and sellers. Its our acceptability thats on the line.
Prior to accord in the online trading, anybody on the arrangement is beatific a accessible counterparty list. Those companies who accept had bad relationships in the accomplished can bang off parties with whom they will not do business. People are actual anxious about credit, McCourt explained. You dont wish to assurance a accord with anyone you dont like their credit, or you dont anticipate they are a reliable supplier. He added explained that accident departments are very complex with accretion these canicule and companies are actual accurate about their counterparts.
What are the bugs in McCourts system? Most actual is bought and awash beneath abiding contracts, he said. Theres not a continued of action in the atom market. We are aggravating to advice added action advance in the atom bazaar by authoritative it easier for humans to do deals, accepting assertive supply times and supply locations. In added words, McCourt achievement to assimilate the accessory market.
But why is there alone one two-hour trading affair per week? Theres not a lot of clamminess in this market, McCourt responded. We best two hours already a anniversary to apply on this. Otherwise, its like watching acrylic dry.
New York Nuclear has alone completed one transaction back ablution this backward endure year. Why? For ample companies, this is something new, he explained. It has to go through reviews, acknowledged reviews, accident administration reviews and all that. Its a abandonment from what they commonly do. In added conversations weve had with utilities and industry insiders, this is the botheration NYMEX faces in cartoon utilities into trading on their exchange.
Still, McCourts action impacted NYMEX trading this accomplished week. Afterwards awning trading was completed endure Wednesday, the NYMEX June 2007 U3O8 uranium bandy al of a sudden dropped. During the antecedent week, McCourts awning snapshot, appear in his Thursday night copy of FreshFUEL showed June 2007 uranium at $122 and December uranium at $130. This accomplished Wednesday, uranium for December supply alone to $125/pound.
No affairs took place. But, it does affirm that buyers would be accommodating to pay $122 to $125/pound to acquirement U3O8 for June and December delivery. Sellers banned to allotment with their material. Five canicule later, Ux Consulting aloft the firms annual atom bulk indicator to $125/pound. Obviously, TradeTech absitively on the front-month and fabricated the acumen alarm of $122 in this Friday copy of Nuclear Bazaar Review, while Ux Consulting absitively aloft Decembers supply ages price.
As a ammunition broker, which is New York Nuclears capital business, McCourt said, As far as atom aggregate is concerned, I dont anticipate anyone knows aggregate thats traveling on. He acicular out his aggregation has been accomplishing affairs off the screens. We dont advance those transactions, he told us. And accurate to his word, McCourt did not acknowledge the appraisement on his companys transactions.
McCourt hopes he can abound his online trading business by alluring added buyers and sellers to column on his awning system. We are allowance the buyers and sellers get calm so eventually these screens will be busy with a lot of numbers, and hopefully a lot of transactions. McCourt aswell acicular out, Thats traveling to add amazing accuracy to this market, which doesnt abide to a abundant admeasurement now. He hopes annual buyers can accomplish routine, baby purchases instead of exceptional ample purchases. Instead of affairs one actor pounds every year, they could buy 20,000 pounds every week, McCourt said.
Conclusion
Over the accomplished year, the aggregate of a aciculate uranium bulk acceleration accompanied by the access of new uranium producers has apparently blocked bulk accuracy instead of accouterment added transparency.
Aside from award out why there is now a $37/pound advance amid the atom and abiding arrangement bulk for U3O8, we accept one cogent changing question. At which levels are the escalating attic prices for the contempo affairs arise for the near-term U3O8 assembly by companies such as Paladin Resources (PALAF) and Uranium One? Until we accretion a bigger compassionate of these attic prices, we may not realistically accept bulk transparency.
In the interim, investors and traders can accept some glimpse of bulk accuracy but alone for concise trading purposes. In a antecedent article, we evaluated some of the accessible bazaar analysis accoutrement accessible to the adult investor. http://stockinterview.com/journal.html
Lets put this into a beeline timeline for bigger understanding.
The aboriginal aggregation out of the box with any adumbration of area the uranium bazaar could arch during the accepted anniversary and into the aboriginal allotment of the afterward anniversary is New York Nuclear. Wednesdays awning trading includes annual ammunition managers, ammunition brokers, annual accident managers and added buyers, who aboveboard off for two hours, aboriginal Wednesday morning, adjoin their counterparts. These could cover added ammunition brokers, uranium producers or their business managers, barrier funds and speculators. To date, bulk break are provided as to what buyers could be accommodating to pay for U3O8 purchases, and at which prices sellers will not allotment with their material.
Granted, little transaction action has taken abode on the Uranium Online trading screens, but the action during those awning trading sessions provides some bulk guidance. On Thursday night, Washington Nuclear (sister aggregation of New York Nuclear) emails the annual copy of FreshFUEL to paid subscribers. In the accomplished two issues weve reviewed, a awning attempt is provided on Page 2. The companys tutorial can be begin on its website at www.uranium.com.
Late Friday night anniversary week, TradeTech publishes changes in the atom bulk in Nuclear Bazaar Review. TradeTech interviews its proprietary account of bazaar participants on Friday afternoon and gathers new abstracts not appear in FreshFUEL. Because the bazaar participants in the Wednesday awning sessions are mostly North American and European, TradeTech may access new abstracts or acquisition out about off-screen affairs post-Wednesdays awning trading. A new annual atom bulk is appear on TradeTechs website at www.uranium.info
Every two weeks, Platts Nuclear Ammunition is appear for the nuclear industry. In the May 21st edition, one of three foreground page account reported, Two uranium auctions accepted to advance U bulk up. Atom bulk transactions, according to traders Platts interviewed, were accepted to ability amid $120 and $140/pound U3O8. Because Platts emails its newsletter to paid subscribers on Friday afore TradeTech issues its annual atom price, Platts subscribers get the old price.
Sometime on backward Monday, Ux Consulting letters its atom uranium bulk to paid subscribers. On a few occasions there accept been negligible discrepancies amid the UxC bulk and the TradeTech annual atom price. Backward Tuesday, non-UxC subscribers acquisition out this consulting firms bulk indicator.
The next day, on aboriginal Wednesday morning a new aeon begins if New York Nuclear conducts the next affair of its awning trading.
For all the hoopla, little uranium bulk accuracy has taken abode with NYMEX futures. Ux Consulting admiral Jeff Combs arise it would yield about six months or so to develop. Its the or so allotment we accept may yield best than Mr. Combs expects. In the way of an apology, NYMEX appropriate this tiny bulk of trading was what was expected.
NYMEX faces the aforementioned hurdles New York Nuclear has yet to overcome. Accident administration departments at utilities catechism whether or not they will participate in these futures. Of those weve had conversations with, we are told, We are still belief this.
Between New York Nuclears Wednesday awning trading of concrete uranium (as against to paper trading) and TradeTechs annual address on the atom uranium price, we access some advice as to the administration of the uranium market.
But this alone provides abbreviate appellation visibility. Until the abiding uranium bulk and the atom bulk attenuated the spread, and until bulk accuracy comes about from the escalating attic contracts, the accepted accessible will abide in the dark.
A absolute band-aid would appear from concrete uranium trading on a admirable scale, as Joe McCourt envisions, instead of the authorization trading now demography place.
Utility ammunition managers attempt with a few handfuls of ammunition brokers for the best bulk break. Utilities accuse about the blackballed speculators whove entered the market. and annual agent adumbrate a abiding bulk about one-half of the US$122/pound bulk indicator arise in Nuclear Bazaar Review this accomplished Friday (another consulting annual chose $125/pound for their price indicator). Some uranium miners anticipation a bulk antagonism accomplished $200/pound. Who is gaming whom? Or is this all allotment of the negotiations action amid producers and end-users?
Meanwhile, added actual bulk accuracy seems to arise at Mestenas approved atom uranium bulk auctions than in the abundant larger, but backstairs uranium marketplace. Yet, the bulk this clandestine uranium ambassador has awash is far beneath than one percent of the uranium captivated in 2006. The present advance amid atom and abiding uranium appraisement has aloft eyebrows and led some to catechism the believability of the atom price.
Mestenas next bargain reportedly takes abode on May 30th, or at atomic thats if offers to buy the U3O8 are due. This time Mestena will accept a bit of competition. An bearding barrier armamentarium has contacted abeyant buyers to accost offers for 200 thousand pounds U3O8 and 100 metric bags U as UF6 - two canicule afterwards Mestena opens the abracadabra envelopes. As added actual is offered to the market, conceivably the atom and abiding bulk will attenuated to a added analytic spread. Perhaps, instead, this advance will abutting if utilities and investors ability a accord on Cameco Corps (CCJ) Cigar Lake project, Rio Tintos (RTP) Namibian amplification and resolution of the March calamity in arctic Australia, and a close date on BHP Billitons (BHP) Olympic Dam expansion.
A Glimpse Inside This Secret World
The broadly heralded fiat uranium trading at the awful publicized NYMEX ring moves forward, but the barter is still analytic for participants, and it is about as absorbing as watching grass grow. In lower Manhattan, this commodity barter was not alone the aboriginal commodity appointment to action trading on platinum added than 40 years ago, but in aboriginal May began alms paper uranium trading. The accessible can play the cardboard chase, but not for the absolute McCoy - U3O8.
In mid-town Manhattan, abreast Admirable Central Station, a bottom accepted commodity exchange, run by New York Nuclear, has real-time awning trading every Wednesday morning amid 7:30 A.M. and 9:30 A.M. And the awning trading is for the absolute affair - the concrete supply of U3O8. The candy uranium is offered for supply aural a 30-day aeon at a accountant uranium about-face facility. Absolute artefact trading in real-time by absolute professionals, who abundance uranium, absorb uranium or act as a agent for either side.
No, the accessible is not arrive to this amiable function. One accept to be a certified bazaar actor to bid for or advertise U3O8 through New York Nuclears Uranium Online. While NYMEX cardboard trading is accessible to amateurs and able traders, Uranium Online alone permits accustomed bodies to bid or action uranium for sale.
We accept all categories as players, New York Nuclears Joe McCourt told StockInterview.com. Those who accept active up to barter concrete uranium on his online awning arrangement cover uranium producers, barrier funds, ammunition brokers and annual ammunition managers. These are the above players in the concrete uranium market, McCourt added.
Our babble with Joe McCourt was absolutely enlightening. After in an email barter with Uranium One (SXRFF) arch controlling Neal Froneman, we were told Joe is a heck of a nice guy. Others in the industry echoed his sentiments.
In a few words, Joe explained why uranium bulk accuracy is anon out of reach, and could abide a allegorical ambition for some time. Theres so few players in the business, and theres a lot of confidentiality, McCourt told StockInterview. Everybody wants to see what everybody abroad does, but they dont wish anybody to see what they do.
McCourt has aswell empiric this clandestineness in his companys online awning arrangement trading of concrete uranium. Everybody wants to see everybody elses posts, but they dont wish to column themselves, he told us.
Surrounded by this bulk of clandestineness and the contempo NYMEX competition, why does McCourt persist? In my opinion, I anticipate that utilities wish transparency, he told us. We wish to advance how the bazaar works.
So who participates in the annual trading sessions? These are humans we apperceive to be bonafide buyers and sellers, McCourt said. And what makes these bonafide? We are in blow with the above players. Weve been in the business for 25 years, and weve done deals with abounding people. We apperceive who is for absolute and who is not for real. (See Joe McCourt end bio.)
How does McCourt awning out the gamers? We accept user agreements, rules and procedures that everybody signs, he told us. Its a contract. If anybody posts something in the system, its a like accurate offer. They accomplish a commitment.
Do the buyers and sellers apperceive with whom they are dealing? No, its anonymous, McCourt said. Only we know. We angle as the hub. They can see us, but they cant see anniversary other. McCourt reassured us his arrangement has kept abiding annal of all affairs and discussions during those trading sessions. We accept a arrangement that is auditable, if some ascendancy comes to us, he said.
Another affair was his companys accord in the trading. We dont do it on our own account, McCourt told us. We are carefully brokers. We are analogous buyers and sellers. Its our acceptability thats on the line.
Prior to accord in the online trading, anybody on the arrangement is beatific a accessible counterparty list. Those companies who accept had bad relationships in the accomplished can bang off parties with whom they will not do business. People are actual anxious about credit, McCourt explained. You dont wish to assurance a accord with anyone you dont like their credit, or you dont anticipate they are a reliable supplier. He added explained that accident departments are very complex with accretion these canicule and companies are actual accurate about their counterparts.
What are the bugs in McCourts system? Most actual is bought and awash beneath abiding contracts, he said. Theres not a continued of action in the atom market. We are aggravating to advice added action advance in the atom bazaar by authoritative it easier for humans to do deals, accepting assertive supply times and supply locations. In added words, McCourt achievement to assimilate the accessory market.
But why is there alone one two-hour trading affair per week? Theres not a lot of clamminess in this market, McCourt responded. We best two hours already a anniversary to apply on this. Otherwise, its like watching acrylic dry.
New York Nuclear has alone completed one transaction back ablution this backward endure year. Why? For ample companies, this is something new, he explained. It has to go through reviews, acknowledged reviews, accident administration reviews and all that. Its a abandonment from what they commonly do. In added conversations weve had with utilities and industry insiders, this is the botheration NYMEX faces in cartoon utilities into trading on their exchange.
Still, McCourts action impacted NYMEX trading this accomplished week. Afterwards awning trading was completed endure Wednesday, the NYMEX June 2007 U3O8 uranium bandy al of a sudden dropped. During the antecedent week, McCourts awning snapshot, appear in his Thursday night copy of FreshFUEL showed June 2007 uranium at $122 and December uranium at $130. This accomplished Wednesday, uranium for December supply alone to $125/pound.
No affairs took place. But, it does affirm that buyers would be accommodating to pay $122 to $125/pound to acquirement U3O8 for June and December delivery. Sellers banned to allotment with their material. Five canicule later, Ux Consulting aloft the firms annual atom bulk indicator to $125/pound. Obviously, TradeTech absitively on the front-month and fabricated the acumen alarm of $122 in this Friday copy of Nuclear Bazaar Review, while Ux Consulting absitively aloft Decembers supply ages price.
As a ammunition broker, which is New York Nuclears capital business, McCourt said, As far as atom aggregate is concerned, I dont anticipate anyone knows aggregate thats traveling on. He acicular out his aggregation has been accomplishing affairs off the screens. We dont advance those transactions, he told us. And accurate to his word, McCourt did not acknowledge the appraisement on his companys transactions.
McCourt hopes he can abound his online trading business by alluring added buyers and sellers to column on his awning system. We are allowance the buyers and sellers get calm so eventually these screens will be busy with a lot of numbers, and hopefully a lot of transactions. McCourt aswell acicular out, Thats traveling to add amazing accuracy to this market, which doesnt abide to a abundant admeasurement now. He hopes annual buyers can accomplish routine, baby purchases instead of exceptional ample purchases. Instead of affairs one actor pounds every year, they could buy 20,000 pounds every week, McCourt said.
Conclusion
Over the accomplished year, the aggregate of a aciculate uranium bulk acceleration accompanied by the access of new uranium producers has apparently blocked bulk accuracy instead of accouterment added transparency.
Aside from award out why there is now a $37/pound advance amid the atom and abiding arrangement bulk for U3O8, we accept one cogent changing question. At which levels are the escalating attic prices for the contempo affairs arise for the near-term U3O8 assembly by companies such as Paladin Resources (PALAF) and Uranium One? Until we accretion a bigger compassionate of these attic prices, we may not realistically accept bulk transparency.
In the interim, investors and traders can accept some glimpse of bulk accuracy but alone for concise trading purposes. In a antecedent article, we evaluated some of the accessible bazaar analysis accoutrement accessible to the adult investor. http://stockinterview.com/journal.html
Lets put this into a beeline timeline for bigger understanding.
The aboriginal aggregation out of the box with any adumbration of area the uranium bazaar could arch during the accepted anniversary and into the aboriginal allotment of the afterward anniversary is New York Nuclear. Wednesdays awning trading includes annual ammunition managers, ammunition brokers, annual accident managers and added buyers, who aboveboard off for two hours, aboriginal Wednesday morning, adjoin their counterparts. These could cover added ammunition brokers, uranium producers or their business managers, barrier funds and speculators. To date, bulk break are provided as to what buyers could be accommodating to pay for U3O8 purchases, and at which prices sellers will not allotment with their material.
Granted, little transaction action has taken abode on the Uranium Online trading screens, but the action during those awning trading sessions provides some bulk guidance. On Thursday night, Washington Nuclear (sister aggregation of New York Nuclear) emails the annual copy of FreshFUEL to paid subscribers. In the accomplished two issues weve reviewed, a awning attempt is provided on Page 2. The companys tutorial can be begin on its website at www.uranium.com.
Late Friday night anniversary week, TradeTech publishes changes in the atom bulk in Nuclear Bazaar Review. TradeTech interviews its proprietary account of bazaar participants on Friday afternoon and gathers new abstracts not appear in FreshFUEL. Because the bazaar participants in the Wednesday awning sessions are mostly North American and European, TradeTech may access new abstracts or acquisition out about off-screen affairs post-Wednesdays awning trading. A new annual atom bulk is appear on TradeTechs website at www.uranium.info
Every two weeks, Platts Nuclear Ammunition is appear for the nuclear industry. In the May 21st edition, one of three foreground page account reported, Two uranium auctions accepted to advance U bulk up. Atom bulk transactions, according to traders Platts interviewed, were accepted to ability amid $120 and $140/pound U3O8. Because Platts emails its newsletter to paid subscribers on Friday afore TradeTech issues its annual atom price, Platts subscribers get the old price.
Sometime on backward Monday, Ux Consulting letters its atom uranium bulk to paid subscribers. On a few occasions there accept been negligible discrepancies amid the UxC bulk and the TradeTech annual atom price. Backward Tuesday, non-UxC subscribers acquisition out this consulting firms bulk indicator.
The next day, on aboriginal Wednesday morning a new aeon begins if New York Nuclear conducts the next affair of its awning trading.
For all the hoopla, little uranium bulk accuracy has taken abode with NYMEX futures. Ux Consulting admiral Jeff Combs arise it would yield about six months or so to develop. Its the or so allotment we accept may yield best than Mr. Combs expects. In the way of an apology, NYMEX appropriate this tiny bulk of trading was what was expected.
NYMEX faces the aforementioned hurdles New York Nuclear has yet to overcome. Accident administration departments at utilities catechism whether or not they will participate in these futures. Of those weve had conversations with, we are told, We are still belief this.
Between New York Nuclears Wednesday awning trading of concrete uranium (as against to paper trading) and TradeTechs annual address on the atom uranium price, we access some advice as to the administration of the uranium market.
But this alone provides abbreviate appellation visibility. Until the abiding uranium bulk and the atom bulk attenuated the spread, and until bulk accuracy comes about from the escalating attic contracts, the accepted accessible will abide in the dark.
A absolute band-aid would appear from concrete uranium trading on a admirable scale, as Joe McCourt envisions, instead of the authorization trading now demography place.
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