The Next Uranium SuperCycle
By Nick Hodge 2015-05-13
The bullish uranium narrative continues to unfold.
Last week it was
Bloomberg reporting that:
Asia’s $800 Billion Nuclear Splurge to Unlock Uranium Motherlode
This is nothing new if you've been following along.
I've long forecast a coming uranium bull market. The drastic supply gap simply guarantees it:
According to the World Nuclear Association, the 437 reactors operating globally will require 66,883 tonnes of uranium this year.
Only 56,184 tonnes were mined in 2014.
Prices must go up by economic law.
As they do — and we know this from history — the companies that mine uranium and those that own land that contain uranium will be valued sharply higher.
This is already happening to some extent, but it's still very early in the cycle.
Uranium boasted the best price performance of all commodities in 2014, with the U308 spot price climbing from $35 to as high as $44 per pound — a 26% gain.
It still has some way to go.
Not only is there already a supply shortfall just given the reactors currently operating...
But as
Bloomberg indicated in its headline... it will get much worse as Asia continues its nuclear splurge.
Post-Fukushima
We're now firmly post-
Fukushima.
Before the disaster there were 58 reactors under construction worldwide. Now there are 69.
That's more.
Before the disaster there were 152 reactors ordered or planned. Now there are 184.
That's more.
Japan is gearing up to restart its reactors.
Just this week the
Japan Times reported:
A panel of nuclear experts on Monday largely approved a government report saying that atomic power remains the cheapest source of electricity despite the rising safety costs triggered by the 2011 Fukushima core meltdowns.
Despite an expected glut in solar power, the government is looking to make nuclear power account for 20 to 22 percent of Japan’s electricity supply by 2030, underscoring its policy of sticking with atomic power even though the majority of the public remains opposed to restarting its idled reactors.
The report said that nuclear will be cheaper than coal, oil, natural gas, wind, and solar in 2030.
But it's China and India that are really going to drive future growth.
China, for example, currently consumes about 19 million pounds of uranium per year. That's forecast to grow 284% to 73 million pounds by 2030. And it only has 4 million pounds of domestic capacity.
It has 23 reactors under construction, 45 planned, and 127 proposed.
India's building six and has 22 proposed. It will need 1,579 tonnes of uranium this year but will produce less than 400.
(20min delay)