David Scutt reports that in a year in which the vast majority of commodities have been pummeled, uranium is one commodity that has managed to buck the trend. According to analysis conducted by Macquarie Research, uranium stocks have been the best performing mined commodity so far in 2015, buoyed in part by a positive demand story and the willingness of buyers to pay for supply security in the bank opinion.
Despite it is somewhat controversial nature, analysts at Macquarie believe the commodity remains a good defensive exposure going forward, suggesting that a continuation of the themes seen in 2015 is likely to result in continued price support. Analysts at the bank point to two years of consistent year-on-year growth, and output at levels not seen since the Fukushima tsunamis and plant damage of 2011, as evidence that nuclear power has been making a quiet comeback. Ultimately this trend indicates that despite the normal public pressure on the global nuclear industry, cheap (on an operating basis) and consistent baseload power generation is not easy to replace, say analysts at the bank.
While nuclear power generation in the U.S. and Europe looks set to wind down in the years ahead, analysts at Macquarie suggest that growth from China, India, Russia and South Korea, along with a ramping up of nuclear power generation from Japan, suggests that nuclear power will remain a growth industry in the years ahead. The Chinese annual uranium requirement is likely to grow by more than the rest of the combined world requirement over the next five years, notes Macquarie. In addition, Japanese units are now returning to the network. We expect that by 2020 we will have a total of 20 Japanese reactors back online. Despite slumping gas and coal prices, the bank forecasts that demand from the U.S. will also remain firm.
Original working URL: https://www.businessinsider.com.au/macquarie-chinas-uranium-demand-is-surging-2015-12
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