Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21
CISCO 2020 Dot com Bubble Stock vs 2021 Bubble Tech Stocks Warning Analysis - 6th Oct 21
Precious Metals Complex Searching for a Bottom - 6th Oct 21
FB, AMZN, NFLX, GOOG, AAPL and FANG+ '5 Waves' Speaks Volumes - 6th Oct 21
Budgies Flying Ability 10 Weeks After wings Clipped, Flight Feathers Cut Grow Back - 6th Oct 21
Why Silver Price Could Crash by 20%! - 5th Oct 21
Will China's Crackdown Send Bitcoin's Price Tumbling? - 5th Oct 21
Natural Gas News: Europe Lacks Supply, So It Turns to Asia - 5th Oct 21
Stock Market Correction: One More Spark to Light the Fire? - 5th Oct 21
Fractal Design Meshify S2, Best PC Case Review, Build Quality, Airflow etc. - 5th Oct 21
Chasing Value with Five More Biotech Stocks for the Long-run - 4th Oct 21
Gold’s Century - While stocks dominated headlines, gold quietly performed - 4th Oct 21
NASDAQ Stock Market Head-n-Shoulders Warns Of Market Weakness – Critical Topping Pattern - 4th Oct 21
US Dollar on plan, attended by the Gold/Silver ratio - 4th Oct 21
Aptorum Group - APM - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 3rd Oct 21
US Close to Hitting the Debt Ceiling: Gold Doesn’t Care - 3rd Oct 21
Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
Original Oculus VR HeadSet Rift Dev Kit v1 Before Facebook Bought Oculus - 3rd Oct 21
Microsoft Stock Valuation 2021 vs 2000 Bubble - Buy Sell or Hold Invest Analysis - 1st Oct 21
How to profit off the Acquisition spree in Fintech Stocks - 1st Oct 21
�� Halloween 2021 TESCO Shopping Before the Next Big Panic Buying! �� - 1st Oct 2
The Guide to Building a Design Portfolio Online - 1st Oct 21
BioDelivery Sciences International - BDSI - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 30th Sep 21
America’s Revolving-Door Politics Behind the Fall of US-Sino Ties - 30th Sep 21
Dovish to Hawkish Fed: Sounds Bearish for Gold - 30th Sep 21
Stock Market Gauntlet to the Fed - 30th Sep 21
Should you include ESG investments in your portfolio? - 30th Sep 21
Takeda - TAK - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 29th Sep 21
Stock Market Wishing Away Inflation - 29th Sep 21
Why Workers Are NOT Returning to Work as Lockdown's End - Wage Slaves Rebellion - 29th Sep 21
UK Fuel PANIC! Fighting at the Petrol Pumps! As Lemmings Create a New Crisis - 29th Sep 21
Gold Could See Tapering as Soon as November! - 29th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

A Supply Crunch Points to Higher Uranium Prices

Commodities / Uranium Sep 11, 2014 - 11:29 AM GMT

By: Money_Morning

Commodities

Dr. Kent Moors writes: With nuclear power bouncing back worldwide, and the number of global uranium mines declining, the signs are building that uranium prices are poised to head higher.

After stabilizing under $30 per pound, prices have begun to rebound, posting their largest gain in more than 30 months. Since August 4, the cost of uranium has climbed by 13.91%.


And given the current labor unrest in Canada, that could be just the beginning of the move…

At the end of August, Cameco (NYSE: CCJ), the main Canadian supplier, locked workers out at the McArthur River mine and Key Lake mill in the Athabasca basin after a strike notice from the union.

As of today, talks to end the first strike in the company’s history have still not been scheduled.

And while both management and analysts have stated the disturbance will have little impact in Cameco’s ability to fill orders, the strike/lockout has had an immediate impact on prices nonetheless.

Due in part to the strike, uranium prices have jumped from $28 a pound this summer to over $32 today.

Prices are higher even though the supply remains ample, even if the calculations go no further than the uranium Cameco has in its own stockpiles. The company can get by on its existing inventory and other sources to meet its sales obligations.
Uranium Prices: The Atomic Beat Goes On

Nonetheless, the market reaction does point to a simple ongoing fact when it comes to uranium prices: A crunch in supplies is certainly coming – as more nuclear power plants are planned and added internationally.

That means any interruption of production anywhere in the world will have an effect on prices.

You see, while the supply side of the equation has buttressed prices, a demand side push is expected as well, especially given the faster than expected move by Japan to reenter the nuclear power market after Fukushima.

In short, the atomic beat goes on… even in places like Japan.

Here’s why…

As desirable as it is to develop a safer alternative, nuclear power is still one of the bedrocks of the power generation that fuels the world economy.

All told, 442 nuclear power plants across the globe provide roughly 16% of its electricity generation.

That figure is going to be impossible to finesse or eliminate… even under the best-case scenarios for the development of wind, solar power, and other forms of alternative energy.

According to the International Energy Association (IEA), world electricity demand is likely to grow 2.7% a year from now until 2015, and then at 2.4% annually until 2030 – making nuclear power even more of a necessary evil.

The result: The nuclear industry is experiencing a major global power surge.

Worldwide, 70 reactors are already under construction, with 553 more reactors planned. Add it all up and that’s more than double the number of nuclear plants in the world today.

What’s more New Delhi has just signed a major uranium (and coal) importing agreement with Australia, marking both a new departure for India and the first ever such trade agreement to South Asia for Canberra.

All of these will work to eventually create a constriction of supply.

Of course, there hasn’t been a uranium supply issue for some time. However, the difference this time around involves the sources of new supply.

The truth is there are now far fewer uranium mines operating than there were a few decades ago. This certainly will have much to do with the anticipated rise in prices.

Unlike other energy sources, a price increase in uranium is less of an issue for end users. This is because the actual cost factor for the fuel in the production of power is lower than with any other generating system.

True, given the construction demands, time delays, and required regulatory oversight, a nuclear plant is an expensive asset to put on line. Yet once it’s built, electricity can be produced more cheaply than any other alternative.

Environmental questions remain, as do concerns over the ability of plants to withstand earthquakes, tsunamis, and other fits of Mother Nature.

Nonetheless, nuclear is on its way back, leading to a concerted move on the supply side to increase the availability of uranium via new mining initiatives.

The Upside for Uranium Investors

All of this should be welcome news for energy investors.

Once again, while the industry giants like Cameco are grabbing the major headlines, smaller mining companies are quickly coming on the scene to help address the looming shortfall in supply.

In this case, investors would be wise to target companies similar to the ones we’ve been pursing in oil and gas. That is, well run, smaller companies that can outperform bigger competitors by bringing in extraction at lower cost. This results from several factors, the most important being lower overhead and regionally-confined production, processing, and distribution.

There will undoubtedly be a number of these companies emerging over the next several years.

One example is a small Canadian “junior” mining outfit that made the news twice last week.

It’s a company called Azincourt Uranium (TSXV: AAZ).

First, the company announced that it has come to an agreement with another Canadian-based junior – Macusani Yellowcake (TSXV:YEL) – to sell them their uranium operations on the Macusani Plateau in Peru. The move will allow Azincourt to concentrate on developing its Canadian property.

That set the stage for the second announcement…

The Athabasca junior also reported the completion of its drilling program at the Patterson Lake North (PLN) property in Saskatchewan. As part of the news, the company reported the discovery of what may be the first significant find (called an “anomalous radioactive mineralization” in the trade) at PLN.

As the uranium supply constriction takes shape, you can expect more small companies like Azincourt to make similar news, especially as uranium prices continue to climb.

Source : http://oilandenergyinvestor.com/2014/09/a-supply-crunch-points-to-higher-uranium-prices/

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in