Washington (Platts)--13May2008

The spot price of uranium continued to tumble over the last week and now
stands at $60 a pound U3O8, according to the latest reports from Ux Consulting
and TradeTech.

The decline -- $3/pound for Ux Consulting and $5/pound for TradeTech --
was apparently accelerated by the decision of Texas-based Mestena Uranium to
sell 100,000 lb U3O8, despite not seeing, according to one market source, a
"strong turnout" of buyers.

Whether Mestena sold the uranium at $60 could not be confirmed, but
several sources said the winning unidentified buyer indicated as much.

Also unclear is whether that elusive "bottom" of this current cycle in
the uranium market is at hand. One analyst said he had been wrong the past
three weeks in predicting that the market would see the price stabilize and
then rise.

Buyers and sellers appear to be making decisions in this market based on
their own needs without necessarily paying much attention to longer-term
supply and demand fundamentals, the analyst said.

Another analyst said there still is abundant supply, with roughly 2
pounds of uranium available for every 1 pound of demand. But whether all those
pounds would be available at the current price appears unlikely, said another
analyst. Some sellers just are refusing to follow this price down any further,
he said.

And utilities, said another analyst, shouldn't get too gleeful about the
price dropping $3-$5/lb in one week. The fact that the price can drop that
fast means that it can also go up by that amount in a week. One could see a
noticeable "snapback" to the price pretty quickly if there is clear evidence
that the price will not sink further, he said.

--Mike Knapik, newsdesk@platts.com