Three Reasons Why Uranium Prices Will Continue to Surge

Uranium (Nuclear Minerals) / Nuclear Power - Economics, Design, & Industry

Date posted: 09/30/14

In pitching stocks, Benjamin Sinclair reports that ever since the Fukushima nuclear reactor damage caused by tsunami in 2011, prices for uranium have been severely depressed. From a high of 70 dollars per pound before the tsunami, uranium sunk below 30 US dollars this year, where it remained for a few months. But now the price has finally started to recover, reaching 34 dollars. While a return to 70 dollar uranium is highly unlikely any time soon, there are reasons to be optimistic about future prices. And for anyone looking to make that bet, Cameco is the best way to do so. On that note, below are three reasons why Sinclair believes such a bet will be successful. 1. Supply issues - It is no secret that many suppliers can not make money with uranium prices this low. As a result, producers have been shutting down mines, something that eventually should help prices rebound. And recently, there have been other supply disruptions. Sanctions against Russia, one of the biggest uranium producers, has threatened to withhold supplies. There have also been uranium production issues for French giant Areva in Niger. Even Cameco itself has had to endure some turbulence, thanks to strikes at two of its mines. These kinds of issues cannot be thought of as one-time events. Rather, they are part of a larger pattern that could significantly boost uranium prices well into the future. 2. Germany - After the Fukushima disaster, a few other countries have shunned nuclear power as well, the most notable being Germany in 2011, Europe largest economy decided to phase out nuclear power by 2022. Unfortunately, that does not fit well with their environmental goals, which involve cutting carbon emissions by 70 per cent from 1990 to 2040. As it stands, more than 45 per cent of their electricity comes from coal, and dirty coal at that. A reversal of this policy is inevitable. 3. And then there is Japan, a country that must restart their nuclear plants or have serious economic issues.