In an analysis published yesterday, Canada's Haywood Securities predicted that, by year end, the spot market for uranium could regain some of the ground it has lost since the metal reached a high of $136 in mid-June.

Analysts J.W. Mustard and Chris Thompson said the rapid price increase from April to June was generated more by speculative discretionary buying than by a demand from utilities companies.

Currently the spot price has declined 34% to the current $90/lb level. To compound the situation, the analysts noted that "as the utilities seem to have taken a collective summer break, in conjunction with a lack of discretionary buying, the price has a clear negative trend."...

Haywood's analysts forecast that "while the spot price has weakened and could weaken a tad more, by the end of the year prices could regain much of the lost ground, setting the stage for a robust 2008 and beyond. With potential brownouts in some areas like India, it is possible that near-term spot could exceed the recent highs."

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