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The majority of listed developer, or "junior", uranium stocks remain bloodied amid further falls in spot uranium oxide (U3O8) prices. The uranium price has more than halved after peaking around $138/lb in June 2007; specialist trade consultants Ux Consulting recently reported spot prices falling $3 week-on-week to $60/lb, while TradeTech reported a $5 slippage, also to $60/lb. Thinly traded uranium futures prices are also falling, according to industry sources. 

At the same time, the term (contract) price has remained stable, dropping only once in the past year by $5 to $90/lb, according to information in recent results from Cameco (CCO CN, CAD 41.59 a share), considered by a number of analysts to be the leading quality uranium producer in the world. Cameco attributed the current premium in the term market to buyers' expectations of higher prices in the future, and a willingness to pay a premium for price predictability and long-term security of supply.

In the past few years, as uranium spot prices rushed upwards to the 2007 peak blow off from lows of around $10/lb, an investor mania had spurred the virtual explosion of would-be uranium companies. The demand side was seen as an irresistible story, with global energy requirements pushing utilities to seek alternatives to conventional power plants, and switching heavily into nuclear choices. The bubble over the sector popped months ago; some of its results can be seen in Uranium One (UUU CN, CAD 4.52), which continues to struggle under the shadow of its Dominion mine in South Africa. 

Uranium One has slashed its projected production numbers several times since October 2007; just last week it decided to abandon the development of the Honeymoon mine in Australia, removing a further 600,000 pounds from the company's 2009 production projections. Had Uranium One been delivering as promised in the early stages of 2007, current spot uranium prices could well have been lower than $60/lb.

Buyers have become more cautious over quality of supply and indeed, Cameco indicated that it continues to sign long-term contracts based on the term price. Cameco also indicated that it believes that utility (power plant) uranium requirements are generally well covered for the next few years, and that utilities have built modest inventories.  

In the result, utilities have been avoiding discretionary purchases of uranium on the spot market. At the same time various traders and producers have continued to offer material for sale, resulting in downward pressure on the spot uranium price. Cameco indicated that it did not see a near term end to this situation. This much is reflected in the quoted prices of uranium juniors, where the average stock price trades some two-thirds off its highs.