Trading in the uranium market is done by a very small number of players. After all, there are about 440 nuclear reactors worldwide, a few dozen trading firms, fuel managers, and a relatively small number of utilities who participate in the actual buying of uranium. Its the front end of the nuclear fuel cycle. Without it, nuclear reactors shut down. The uranium price has been skyrocketing since Christmas week 2000, with no end in sight. Forecasts range from $50/pound to well above $100/pound. Few believe the spot uranium price will go lower in the near future.

Its become a fun game. Every Tuesday night (Monday afternoon, if you are a subscriber to the Ux Consulting), you will see the spot uranium price posted on the companys front webpage. Moments later, the Yahoo and other Internet chat boards light up with commentary about the current uranium price and where it might head next. The spoiler is that TradeTech LLC issues its spot uranium price on Friday to subscribers and to the general public on Sunday night. Investors have been betting on the price swings of their favorite junior uranium stocks (more leverage, more risk/reward) by trying to second-guess the uranium spot price. Now, you can find out exactly how Ux C arrives at their weekly spot uranium price, from the president of Ux C, himself: Jeff Combs.

StockInterview: How does Ux Consulting arrive at your weekly spot uranium price?

Jeff Combs: We have a pretty specific definition. What were looking for is the lowest offer of which we are aware, at around the time we publish the price. The quantity being offered has to meet certain parameters. It has to be a certain size transaction within a certain timeframe. So were not really trying to cover transactions, per se. Obviously, where there is a transaction that takes place, theres an offer embodied in that. Were really trying to capture where the market is going based on current offers, rather than where it has been.

StockInterview: So is your published spot price more of a predictor than an actual trade?

Jeff Combs: Its a predictor only in the sense that the next deal is likely to be done at the lowest offer price if the market is working efficiently. Its like in the stock market where the lowest offer price will be taken first, although the stock market is a lot more efficient than the uranium market. Thus, we arent predicting the price of the next deal per se, but reporting the lowest offer price, which is an indication of where the sell side of the market is at that point in time.

StockInterview: So the weekly published spot uranium price is not based upon an actual sale of uranium that took place that past week?

Jeff Combs: Since its more of a forward-looking concept, the sale that is, the coming together of buyer and seller - hasnt necessarily taken place. But the level of the lowest offer indicates where the market is at that point in time. The sale itself shouldnt deviate much, if any, from the offer price. This is especially true in a sellers market, where buyers dont have much negotiating power. But its also true in a buyers market, as sellers are looking to offer an attractive enough price to encourage the buyer to take the material.