Washington (Platts)--25Nov2008

The spot price of uranium rose $2 a pound over the past week to $55/lb
U3O8, according to the latest reports from TradeTech and Ux Consulting.

But some analysts believe that the recent rise in price -- from $45/lb in
late October to $55/lb this week -- has slowed and may in fact have plateaued.

The price "seems to have hit a wall," said one, with not a lot of
near-term demand apparent and new supply entering the market from at least one
major trading firm. Buyers that remain, the analyst said, do not appear to be
"in the mood" to chase the spot price higher.

Ux said that demand was expected to be moderate over the next three
months. But it said there could be more demand if there are more liquidations
by financially driven sellers who would cut prices in order to move material.
Demand could also increase if there are additional problems in the production
sector, Ux said.

But Ux also said that some suppliers "believe, or are acting as if they
believe," the price could weaken in the coming weeks. One deal is known to
have occurred early in the week of November 17 with a producer selling a
moderate amount of uranium for March 2009 delivery at a fixed price of $54/lb.

Some of those bearish sentiments are being fueled by concerns that the US
Department of Energy may start selling significant amounts of uranium in 2009.

In a November 17 letter to DOE Assistant Secretary for Nuclear Energy
Dennis Spurgeon, the Uranium Producers of America said that while it was
pleased that DOE was making progress on producing a management plan for sales
of excess government uranium inventories, it was "disturbed by a rumor we have
heard concerning the annual sales amounts."

The UPA said that a consensus US nuclear industry position was that any
sales by DOE should be phased in over a period of years rather than selling it
in the near term at annual volumes approaching 10% of US utility requirements.

Meanwhile, Denison Mines said Tuesday that it was temporarily closing its
Tony M uranium mine in Utah "due to the current economic situation, including
the current uranium market." Denison said this would cut its US production in
2009 by about 200,000 lb to between 1.2 million and 1.6 million lb.