Clara Denina, Reuters, reports that uranium prices are expected to outperform other commodities in 2016 and beyond as a global climate change deal and growing demand from Asia bolster the prospects of the nuclear industry.
The metal that powers nuclear reactors has been gradually recovering from a sharp decline in the wake of tsunamis in Japan in 2011 and damage to one nuclear power plant, and has gained this year as several other commodities slumped due to oversupply and concerns about Chinese economic growth and U.S. monetary tightening.
It is expected to climb further, according to analysts, a move that supports nuclear power generation and in turn uranium. Nuclear power stations currently provide around 11% of the world electricity but the share is likely to increase as China and India expand their capabilities.
China is seeking to reduce its dependence on polluting coal - plans to build six to eight nuclear power plants a year for the next five years, and India aims to generate 25% of its electricity from nuclear by 2050, up from 4% in 2013. Meanwhile Japan is restarting four reactors, which may accelerate the country return to atomic energy.
Kazakhstan, the biggest uranium producer, has just signed cooperation agreements with Chinese companies to build a nuclear fuel plant in the central Asian country, while Cameco, the largest listed uranium mining company, signed a 5-year deal in April to supply fuel to Indian nuclear reactors.
Estimates of the global market surplus range from 20 million to 27 million pounds in 2015, which they say is likely to fall to between 7.5 million and 10 million by 2020.
Around 150 million pounds of uranium are estimated to have been consumed in 2015, according to data from the World Nuclear Association. Kazakhstan is the biggest uranium producer, followed by Canada and Australia, while the U.S. is the biggest consumer, followed by France and China. Forecasts consumption will rise to just below 200 million pounds by 2020.
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