Washington (Platts)--11Apr2008

The spot price of uranium may be poised to rise, several analysts said
this week after Taiwan Power was said to have rejected all the bids it
received on April 8.

There were late reports of a deal done within the past several days at a
price believed to be about $69 a pound U3O8. That deal may be an outlier, one
analyst said, but it also could suggest there still are sellers who are
willing to be aggressive to complete a transaction.

It was not immediately clear why Taipower rejected the bids. The utility
was seeking up to 300,000 pounds U3O8 equivalent as either U3O8 or UF6 for
delivery later this year. In the past, such a rejection by the Asian utility
has meant that offer prices were above the current market price.

In their latest reports, price-reporting firms TradeTech and Ux
Consulting said the spot price was $71 a pound U3O8.

Before the bidding, some market analysts suggested that the Asian utility
could see some material priced slightly under $70/pound, but said most offers
would be at or above $70. That level seems to be a "friction point" that most
sellers don't seem ready to drop below, said one trader.

Platts' assessment, based on discussions with market sources, suggestes
that spot U3O8 transactions over the next week will likely occur within the
range of $69-$76/pound U3O8, up from this week's range of $68-$75.

Some analysts attending a fuel cycle conference in Miami said they
believe many published supply-and-demand projections may underestimate how
tight supply could be in the next decade.

If that perspective takes hold among uranium investment funds, there
could be "a noticeable uplift in the spot price," said one analyst. He added,
however, that some investors seem comfortable not buying immediately after the
market starts to turn upward. "They want to make sure the trend is right," he
said. But once they are convinced that it is on a firm upward trend, then
there could be "significant buying."

--Mike Knapick, newsdesk@platts.com