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It was a quiet week, but at the same time a busy week.

Four spot uranium buyers are actively seeking about one million pounds of U3O8 equivalent. “A non-US buyer purchased 200 thousand pounds U3O8 for delivery this month,” wrote Nuclear Market Review (NMR) editor Treva Klingbiel in the magazine’s June 15th issue. “Two sellers are currently evaluating bids received this week in response to their auctions.”

Consequently, NMR reported the TradeTech’s Uranium Spot Price Indicator remains unchanged from the previous week at US$138/pound U3O8.

NMR also reported 12 utilities continue to seek approximately 35 million pounds U3O8 equivalent in the long-term market, for delivery starting in 2007.

Following the World Nuclear Fuel Market (WNFM) conference, held earlier this month in Athens, we reported that utilities and miners were bitterly divided over the uranium price.

Now it appears the two uranium price reporting services are bitterly divided over whether or not the uranium price market is transparent and liquid. Others are chiming in, too.

TradeTech’s chief executive Gene Clark presented his thesis that the uranium market already has liquidity and transparency. After polling his audience about whether or not they could buy uranium when they needed it, he discovered that each one could.

On the transparency issue, Dr. Clark explained that market participants generally did know the price level. He compared the uranium buying experience to the diamond district in New York City, where dealers do know the market price for buying and selling diamonds. Each side is familiar with the merchandise and its market value. Hence, the wholesale diamond market – for the dealers – is a level playing field. No so for the tourist from Iowa who pays retail plus, plus, plus.

Promptly, Ux Consulting’s Jeff Combs responded with an article, entitled ‘Antipathy in Athens.’ Combs argued the uranium market lacks transparency and liquidity. He explained that while the WNFM audience agreed with Dr. Clark, they could not buy uranium at the price they wanted.

Major uranium producers Cameco, Areva and ERA were paid an average of US$21, $23 and $18, respectively for their U3O8 production in 2006. Of course, this means utilities were delightfully paying less than one-half the average spot price that year. And now upstarts Paladin Resources and Uranium One are enjoying the higher uranium pricing. This must aggravate the major companies locked into legacy contracts and who ‘paid their dues’ sticking through the thin days of the uranium price drought.

The sad reality is one doesn’t always get the price one desires. Under the Combs presumption, nickel traders who went long LME contracts in May probably didn’t get the exit price they had in mind. Similarly, speculators in UraMin shares would love to turn back the clock a few days so they could have added more to their positions. The financial markets aren’t always kind and generous. And as any veteran trader knows, hindsight is as useful as the proverbial breasts on a bull.

In this week’s issue of NMR, Clark responded to the Combs article, writing in an article entitled ‘Apples and Oranges.’ He started, “Some in our industry erroneously confuse the mechanics of the spot market with the fundamentals of the long-term market.”

Using nickel and lead as examples, Clark wrote, “The fact is that the spot price does reflect fundamentals – the fundamentals of the spot market. In this sense, it is no different than most other commodities.” He explained, “When LME stocks dropped, in recent months, to below one day’s worth of global nickel consumption, the spot price reflected this fundamental supply shortfall by rising 300 percent…”

This confirms a basic economic premise:  overpowering demand upon encountering low supplies results in an abrupt price increase.

Fuel Cycle Week (FCW) publisher Andrea Jennetta takes both parties to task. Savvy Jennetta observes that the market isn’t transparent because market participants don’t want it to be. She also doesn’t believe the market has liquidity, and advocates the recent NYMEX uranium futures as a possible solution. Unfortunately, no one seems to understand the presentations made by NYMEX cheerleader Brad Leach. FCW senior editor Nancy Roth said the Athens affair was dominated by ‘Fuel Cost, Market Transparency Angst.’

In a humorous email exchange we had with Yuriy Humber of Bloomberg News (Moscow) about this debate, he argued for more price transparency as well, writing, “… everyone talks of transparency, but don’t want to use any transparent mechanism for sales.” He also referred to market participants as ‘Celtic druids.’

Finally, we return to New York Nuclear Co in this debate. An open trading exchange does take place for market participants every week, normally on Wednesday mornings. We interviewed Joe McCourt about uranium price transparency and concluded that physical uranium trading provides the most effective method for accomplishing what participants want. This isn’t fiat trading, as offered by NYMEX.

When not solely relying upon uranium auction results, we also note that both price reporting services have drawn upon McCourt’s screen session trades over the past few months in determining their spot uranium price indicators.

But the same solution eluding McCourt and which is presently accounting for the molasses-slow trading on NYMEX? Risk management divisions at utilities are not sold on either idea.

No utility appears willing to give away their hand in this poker game. Fuel brokers for Exelon aren’t likely to spill their secrets to Dominion or Entergy. And U.S. utilities keep their intentions hidden from the secretive Asian utilities. After all, each utility is trying to lock-in as much uranium as possible for the fewest dollars.

Ask BHP Billiton and Rio Tinto. Some of the price rise over the past twelve months has come from exercising flexible options on legacy contracts. Part of the price hysteria has driven utilities to ‘bulk up’ on uranium inventories… just in case.

Matthew Smith of TheInvestar.com told us, “The Canadian Index recently hit a support level, and we saw a nice, little rally on Thursday and Friday.” Smith continues to believe his Uranium Index could still go lower by another 10 percent. He told us, “This would be the last support level since the inception of the index.”

Smith pointed out that Cameco continues hitting new highs, “We will have to see this slow before the rest of the uranium mining shares are able to rise.” He believes we are near a yearly bottom.

On Friday, we found out that two uranium companies we have closely followed, Strathmore Minerals and Uranerz Energy, are both having annual shareholder meeting on Tuesday, June 19th. An interesting development is that both companies have Wall Street banking firms coming to their meetings. Whether or not this is an outcome of the Raymond James uranium conference held in early May remains unknown.

But this confirms what we have suspected, and what Matthew Smith has hinted at. Bargain hunters are picking up declining shares from those who sold in May and went away. And those now fretting, but who didn’t sell in May and wish they had.

Occasional technical consultant David Michaud told us in April that he heard many would be selling in late April and buying back sometime in July. Weak Junes are followed by stronger Julys more than half the time, we were told.

One of the better suggestions, which Andrea Jennetta reported upon, was that the utilities join together and start up a mutual fund of just uranium companies. In this way, utilities have a readily available supply of material from which they can draw. Nice idea. This resembles a path Japanese and Chinese utilities have quietly begun to take and not just in Australia and Kazakhstan.

Hopefully, U.S. utilities will start down this same road and soon. We are aware of private equity firms snooping around the U.S. junior uranium mining sector. It would be quite tragic should utilities be forced to buy from the private equity sector instead of the more vulnerable junior uranium companies.