Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
1. GOOGLE (Alphabet) - Primary AI Tech Stock For Investing 2020 - 17th Jan 20
ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th - 17th Jan 20
What Expiring Stock and Commodity Market Bubbles Look Like - 17th Jan 20
Platinum Breaks $1000 On Big Rally - What's Next Forecast - 17th Jan 20
Precious Metals Set to Keep Powering Ahead - 17th Jan 20
Stock Market and the US Presidential Election Cycle  - 16th Jan 20
Shifting Undercurrents In The US Stock Market - 16th Jan 20
America 2020 – YEAR OF LIVING DANGEROUSLY (PART TWO) - 16th Jan 20
Yes, China Is a Currency Manipulator – And the U.S. Banking System Is a Metals Manipulator - 16th Jan 20
MICROSOFT Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 15th Jan 20
Silver Traders Big Trend Analysis – Part II - 15th Jan 20
Silver Short-Term Pullback Before Acceleration Higher - 15th Jan 20
Gold Overall Outlook Is 'Strongly Bullish' - 15th Jan 20
AMD is Killing Intel - Best CPU's For 2020! Ryzen 3900x, 3950x, 3960x Budget, to High End Systems - 15th Jan 20
The Importance Of Keeping Invoices Up To Date - 15th Jan 20
Stock Market Elliott Wave Analysis 2020 - 14th Jan 20
Walmart Has Made a Genius Move to Beat Amazon - 14th Jan 20
Deep State 2020 – A Year Of Living Dangerously! - 14th Jan 20
The End of College Is Near - 14th Jan 20
AI Stocks Investing 2020 to Profit from the Machine Intelligence Mega-trend - Video - 14th Jan 20
Stock Market Final Thrust - 14th Jan 20
British Pound GBP Trend Forecast Review - 13th Jan 20
Trumpism Stock Market and the crisis in American social equality - 13th Jan 20
Silver Investors Big Trend Analysis for – Part I - 13th Jan 20
Craig Hemke Gold & Silver 2020 Prediction, Slams Biased Gold Naysayers - 13th Jan 20
AMAZON Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 11th Jan 20
Gold Price Reacting to Global Flash Points - 11th Jan 20
Land Rover Discovery Sport 2020 - What You Need to Know Before Buying - 11th Jan 20
Gold Buying Precarious - 11th Jan 20
The Crazy Stock Market Train to Bull Eternity - 11th Jan 20
Gold Gann Angle Update - 10th Jan 20
Gold In Rally Mode Suggests Commitment of Traders (COT) Data - 10th Jan 20
Disney Could Mount Its Biggest Rally in 2020 - 10th Jan 20
How on Earth Can Gold Decline During the U.S. – Iran Crisis? - 10th Jan 20
Getting Your HR Budget in Line - 10th Jan 20
The Fed Protects Gamblers at the Expense of the Economy - 9th Jan 20
Last Chance to Get Microsoft Windows 10 for FREE! - 9th Jan 20
The Stock Market is the Opiate of the Masses - 9th Jan 20
Is The Energy Sector Setting Up Another Great Entry? - 9th Jan 20
The Fed Is Creating a Monster Bubble - 9th Jan 20
If History Repeats, Video Game Stocks Could Soar 600%+ - 9th Jan 20
What to Know Before Buying a Land Rover Discovery Sport in 2020 - 8th Jan 20
Stock Market Forecast 2020 Trend Analysis - 8th Jan 20
Gold Price at Resistance - 8th Jan 20
The Fed Has Quietly Started QE4 - 8th Jan 20
NASDAQ Set to Fall 1000pts Early 2020, and What it Means for Gold Price - 8th Jan 20
Gold 2020 - Financial Analysts and Major Financial Institutions Outlook - 8th Jan 20
Stock Market Trend Review - 8th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Nuclear Energy Returns to Japan, Forces Uranium to Step Up Its Game

Commodities / Nuclear Power Nov 26, 2014 - 02:16 PM GMT

By: Jeff_Opdyke

Commodities

A funny thing happened on the way to a nuclear-free world — Japan realized what a stupid idea that was.

You will probably recall that in the wake of the earthquake/tsunami/Fukushima nuclear disaster Japan shuttered its 50 nuclear power plants, which were supplying between 30% and 40% of the island-nation’s electricity needs. For the first time in more than three decades, Japan was totally dependent on non-nuclear fuels. The country became a poster-child for a nuclear-free future, and countries including Germany, Italy, Sweden and others followed suit, announcing they, too, would phase-out nuclear energy.


The nuclear renaissance was dead — or so the mass media liked to report.

Only, it wasn’t dead.

Now, Japan is back in the nuclear energy game, and that can only mean one thing: Now is the moment to grab exposure to the deeply undervalued uranium market.

I already have my Profit Seekerreaders exposed to uranium. We own a fast-growing uranium miner that only recently began production. As such, its shares, once valued as a uranium-exploration company, are now being revalued as a producer — a process that means the share price will rise, because producers are worth more than explorers.

The reason I’ve put Profit Seeker readers into uranium is simple: Reports of the death of the nuclear industry were greatly exaggerated in the aftermath of Fukushima.

Reactionaries in the environmental community, in the consumer industry, at various levels of government and in the media — especially the financial media — immediately claimed that Fukushima sounded the death knell for nuclear. They were wrong then. They’re wrong now. As I wrote on April 29, 2011, just weeks after the Fukushima disaster:

To presume that the Fukushima radiation crisis after Japan’s quake/tsunami has put an end to the nuclear renaissance … is simply naïve and an irrationally optimistic misreading of events.

And now Japan’s energy industry and its government are living proof of that. They’ve begun restarting the country’s closed plants. They’ve come to the realization that a nation with no energy resources and which is dependent on oil and gas imports puts itself at economic risk to a price or supply shock. Nuclear is the answer.

Japan restarting its fleet of nuclear plants will add to demand for uranium. That increased demand comes at a time when new nuclear plants are opening all over the world, particularly in developing economies but also in the West. The U.S. has plans for 13 new nuclear reactors, while Canada, France and the U.K. are also increasing their nuclear-power capacity.

And here’s the rub: The uranium-mining industry today is already incapable of meeting the annual demand from the world’s existing nuclear plants. As new plants come online, that additional demand will put great strains on the mining industry … and prices for the fuel must rise as a result.

Nuclear plants use a prescribed and measured amount of uranium annually. The roughly 435 plants that exist today live off of 86,000 tons on uranium every year. The industry, however, produces just 75,000 tons annually. Making up the shortfall is above-ground supplies that exist in large part because Japan stopped using uranium for three years.

Now, that supply will begin to quickly dwindle. And as 70 new plants come online in the next few years, the nuclear industry will find that uranium is a dear source, indeed. Its price will reflect that wide chasm between supply and demand. After all, no company is going to build a multi-billion nuclear plant and then let the thing collect spider webs because of a shortage of supply.

Nuclear-plant operators will bid up prices to a level that prompts uranium miners to go out and find new supplies.

And that price is in the range of $70 a pound — roughly double today’s spot price.

A Supply and Demand Imbalance

You want to own exposure to uranium specifically because the spot price will — absolutely must — rise. The laws of supply and demand dictate it. Nuclear plants in operation and now under construction have no other option but to consume uranium … but the miners will need $70 a pound — at least — to meet all the demand.

So, uranium should be a core holding in every portfolio simply because of the bullish uptrend it’s approaching.

Profit Seeker readers are well-positioned for that uptrend with a small-cap, fast-growth miner that, with uranium prices at $70 a pound, will likely see its share price rise by 10-fold, if not more.

You can get in on a slower-growing alternative by owning shares of Uranium Participation Corp (Toronto: U). The company owns a stockpile of several million pounds of uranium, fully expecting — as I and the entire uranium industry do — that prices are headed much, much higher. Uranium Participation acts a bit like an exchange-traded fund (ETF), in that the shares rise and fall alongside the price of uranium. It’s a good, long-term holding for those who see that uranium is quickly approaching a classic supply-demand squeeze that will have uranium owners benefiting greatly.

Until next time, stay Sovereign …

Jeff D. Opdyke
Editor, Profit Seeker

As a lifelong world traveler, Jeff Opdyke has been investing directly in the international markets since 1995, making him one of the true pioneers of foreign trading. These days, he is Investment Director and the editor of the Profit Seeker and The Sovereign Investor, The Sovereign Society’s exclusive monthly research newsletters.

http://thesovereigninvestor.com
© 2014 Copyright  Jeff Opdyke - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 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

6 Critical Money Making Rules