These days the future of uranium is quite bullish, despite the decline of the price of uranium from $52/lb to $49/lb over the past 6 months. There are several reasons to believe the near—term trend in uranium price will shift and the price will start rising in 2013. One reason are the strong supply and demand fundamentals; due to the recent decline of the commodity prices, many uranium projects got delayed or shut down, which will translate into a supply shortage over the next few years. The rising demand in uranium will be triggered by industry catalysts such as a strong ongoing demand for nuclear power especially in Japan and China, as well as the expiry of the Russian Highly Enriched Uranium (HEU) agreement to down-blend material from nuclear warheads into reactor fuel. Another industry sign are the recent acquisitions in the sector. Cameco, one of the biggest uranium producers in the world has just acquired BHP’s Australian uranium deposit for $430 million; and others are ready to snap up quality projects too.
All in all, these are compelling and very bullish signs for uranium’s bright future.
A previous blog post on uranium earlier this year showed a slightly positive but reluctant outlook for this commodity.
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