Palisade Research opines that since 1929, uranium has seen three momentous bull markets. The first occurred from 1943 to 1955, and was spurred by an incentive program created by the US Government. The competition for nuclear warheads had begun, and the DoD was in dire need of uranium. Through the Atomic Energy Commission, a generous price for uranium was offered, igniting a staking frenzy. By the 1950s, the program was scaled back and incentives halted, ending the first uranium bull market. The 1973 to 1979 bull run was triggered by OPEC oil embargo, resulting in a global economic crisis.
Prior to, uranium was floating lower, and had bottomed out at $6/lb., before investors began flocking to alternative sources of power. Nuclear power was a great beneficiary, and afterwards saw rapid expansion. Prior to the oil crisis, global capacity nuclear capacity grew at an average of 2,400 MW per year. From 1973 to 1990, this jumped to 16,000 MW with the U.S. building 25% of the 321 new reactors in the world. This run was ended by the media re Three Mile Island incident in 1979. The last and most recent uranium bull occurred from 2001 to 2008. China and India were growing at an unprecedented rate. In 2007, almost half of the world reactors were being built in China and India, with 64 planned and 158 planned, respectively. Oil prices were increasing, and the onus was once again placed on alternative energy sources.
The agreement between the U.S. and Russia, under the Megatons to Megawatts program, was also scheduled to end, removing significant supply from the market. This was accompanied by Cameco Cigar Lake mine flood and loss, and hedge funds hoarding the physical commodity. Uranium collapsed was caused by the 2008-2009 financial crisis, and investors liquidated their positions en masse. Uranium experienced a small renaissance in 2011, but this was cut short due to the Fukushima Daiichi nuclear incident in Japan caused by earthquake and subsequent tsunami.
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