Myra P. Saefong reports that the outlook for the uranium market (and for increased exploration and mergers) might have brightened in August after Japan restarted the nuclear reactor at the Sendai power plant. But demand for uranium fell in the aftermath of the 2011 disaster at the Fukushima Daiichi reactor. Uranium investments, including shares of producers and exchange-traded funds, have been slow to recover. Now, analysts say, the first restart of a Japanese reactor since Sept. 2013 presages a revival for prices of the commodity and related investments. How much, and how quickly, those investments rebound is a matter of debate. But many now believe a corner has been turned.
The story for uranium can be summed up as inevitable, if not imminent, said Brien Lundin, publisher of the metals and natural-resource subscription publication Gold Newsletter, who called the long-term supply and demand outlook exceptionally bullish. That could lead to a turnaround for shares of uranium producers and exchange-traded funds, such as Cameco Corp., +4.23% and the Global X Uranium ETF, +2.31% which took hits after the tragedy and have yet to fully recover. Japan was respected for its nuclear savvy, a respect that carried through the countrys own disaster, Perry said. Japan is handling of the disaster and recovery has gone a long way toward rebuilding that, he said, so what the Japanese do with their nuclear power will influence most of the world. That may not translate into an immediate benefit for the uranium market, however, because Japan is believed to have a substantial stockpile.Japanese utilities have about 120 million pounds of uranium stockpiled, Ostroff says market sources tell him enough, he believes, to supply all of its pre-Fukushima needs for six years, assuming an average annual usage of about 20 million pounds across 54 reactors.
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