VUI Wrong About Importance of "Spot Price of Uranium"
Recently I asked this List if anyone else was following the current selling price of uranium.
Today I noticed the full-page ad in the 2-13-2008 issue of The Star-Tribune referred to the "confusion" being caused by persons who were discussing the spot price of uranium, which, by the way, remained at $75 this week. The "confusion" according to the ad is caused by the fact that uranium is usually sold by contract.
On the Internet, I found the following explanation of the relationship between the spot price and the contract price:
"The structure of uranium supply contacts varies widely. Pricing can be as simple as a single fixed price, or based on various reference prices with economic corrections built in. Contracts traditionally specify a base price, such as the uranium spot price, and rules for escalation. In base-escalated contracts, the buyer and seller agree on a base price that escalates over time on the basis of an agreed-upon formula, which may take economic indices, such as GDP or inflation factors, into consideration."
"A a spot market contract usually consists of just one delivery and is typically priced at or near the published spot market price at the time of purchase. However 85% of all uranium has been sold under long-term, multi-year contracts with deliveries starting one to three years after the contract is made. Long-term contract terms range from two to 10 years, but typically run three to five years, with the first delivery occurring within 24 months of contract award. They may also include a clause that allows the buyer to vary the size of each delivery within prescribed limits."
Therefore, it appears the uranium spot price is a basic indicator of the market price of uranium and that price has fallen in the last year about $63. I am very sorry to see, this week, that fall hesitating about continuing the downward slide.
Today I noticed the full-page ad in the 2-13-2008 issue of The Star-Tribune referred to the "confusion" being caused by persons who were discussing the spot price of uranium, which, by the way, remained at $75 this week. The "confusion" according to the ad is caused by the fact that uranium is usually sold by contract.
On the Internet, I found the following explanation of the relationship between the spot price and the contract price:
"The structure of uranium supply contacts varies widely. Pricing can be as simple as a single fixed price, or based on various reference prices with economic corrections built in. Contracts traditionally specify a base price, such as the uranium spot price, and rules for escalation. In base-escalated contracts, the buyer and seller agree on a base price that escalates over time on the basis of an agreed-upon formula, which may take economic indices, such as GDP or inflation factors, into consideration."
"A a spot market contract usually consists of just one delivery and is typically priced at or near the published spot market price at the time of purchase. However 85% of all uranium has been sold under long-term, multi-year contracts with deliveries starting one to three years after the contract is made. Long-term contract terms range from two to 10 years, but typically run three to five years, with the first delivery occurring within 24 months of contract award. They may also include a clause that allows the buyer to vary the size of each delivery within prescribed limits."
Therefore, it appears the uranium spot price is a basic indicator of the market price of uranium and that price has fallen in the last year about $63. I am very sorry to see, this week, that fall hesitating about continuing the downward slide.
Hildred
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