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Uranium Resources, Inc. (URRE) Message Board

  • cwp39b cwp39b Oct 6, 2008 12:20 PM Flag

    URRE longs! You better READ THIS

    September 30, 2008–The uranium spot market experienced a series of shocks over the course of September. The first tremor came when the credit crisis spilled over into the uranium market at mid-month when Lehman Brothers, which had been involved as a uranium market participant over the past two years, was forced into bankruptcy. Then as the credit crisis grew so too did supply, as both traditional and non-traditional sellers came to the market in an effort to raise cash. As a result of this increase in supply, TradeTech’s Exchange Value dropped by nearly 20 percent or $12.50, to $52.00 per pound U3O8.

    In times of falling prices and uncertainty in the marketplace, many sellers prefer to sell material through off-market transactions, and the current environment is no exception. Sellers are hoping that a less noticeable entry into the market will allow them to place their material before the marketplace has an opportunity to react to this new supply with lower prices. Buyers, anticipating further price declines, are increasingly hesitant to commit to purchases and are backing away from the market. As a result, have-to sellers become more aggressive, essentially “leap-frogging” over one another in an effort to conclude transactions. This behavior will continue until suppliers have satisfied their need for cash and/or demand increases to absorb the excess supply.

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