In a recent interview with Chang, he updates earlier conclusions with the following ...
1. China will have a major demand for uranium as the number of its nuclear reactors increases from 36 today to 52 by 2020.
2. The global push toward cleaner and greener energy is good for uranium. Nuclear is the only form of base-load energy that emits zero carbon.
3. As contracts start rolling off in bunches, utilities will be buying on spot and aggressively contracting to shore-up their future needs.
He predicts that a price of $80 per lb is the breakeven required for global supply and demand, and expects the price change soon ...and violently, says Chang In this interview with The Energy Report, he explains that electric utilities will begin to run short of fuel even before 2020, when 33 additional reactors are expected to come on line. With that in mind, Chang predicts that prices could triple in the next few years, and highlights a half-dozen equities that will likely supply the increased demand and thereby deliver multiples to investors.
The Energy Report: Does cheap oil depress uranium demand? Rob Chang: It should not, because uranium is the fuel for nuclear power, whereas oil is more of a transportation energy source. Oil is not commonly used as a source of base-load power supply. However, we have noticed that uranium equities seem to be greatly influenced by the oil price. For some reason or another, it does occur. But I would not attribute the decline in uranium equities entirely to the decline in the oil price. There has been of late a flight from all commodities. TER: Would you say the price of oil serves as an index of the strength of the world economy? RC: Absolutely. As global activity picks up, we will see more construction and a greater use of transportation. And you need oil to make that happen. TER: Do you expect nuclear power usage to grow despite the global economic lull? RC: I do. China is moving forward with determination on nuclear power.
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