The spot price for uranium has surged 25 per cent over the past five weeks, a performance unmatched by the stocks of companies in the uranium sector. From a basket of 56 stocks tracked by Haywood Securities, for example, 42 fell over the last week, three were unchanged, and just 11 saw gains.
“These companies are putting out news that is good for the supply and demand situation, but hurts the individual companies,” said Dundee Securities analyst David Talbot.
Supply is shrinking as uranium producers, stung by the global financial crisis, have been closing mines, delaying developments and cutting production forecasts.
“Almost every single producer has downgraded their forecast for 2008 production guidance,” said Haywood Securities analyst Geordie Mark. “It's something like 5.5 million pounds already downgraded ... when production last year was around 107 million pounds, it's a big deal.”
