uranium

Interesting article posted on another site today.


A short extract from Casey Energy Speculator.

"AMERICA'S IMPENDING URANIUM SHORTFALL

The price of uranium continued its long rise this month, gaining 15% to reach a new record high. But stocks of uranium companies failed to follow along. Despite the commodity making its most dazzling bull run in history, the share prices only shrugged their shoulders in 2007– an indication that investors are beginning to doubt that the price of uranium can hold these levels.

It’s a doubt we don’t share. A close look at the fundamentals shows us that the price of uranium isn’t about to change direction any time soon. Instead, a worsening supply crunch in the U.S. will add strength to the bull market in uranium. But before we move on to some of the best ways for playing uranium’s continuing surge, let’s look at the long-term demand picture in the U.S.

Over the last decade, unlike the situation in China, India and elsewhere, America’s nuclear industry has been dormant. No new U.S. nuclear reactors have come online, and six have been decommissioned.

It’s no surprise that U.S. consumption of nuclear fuel hasn’t grown. Purchases of yellowcake for reactor fuel have fluctuated between 40 and 60 million pounds per year, but those fluctuations aren’t as significant as they might seem, since power plant operators may purchase up to a two-year supply at a time.

The demand from U.S. reactors will remain in this range, partly due to the fact that the Energy Policy Act of 2005 only authorized subsidies for up to six new nuclear reactors, and also partly because there are no planned shutdowns within the next 4 years. Then, the delayed effect of some remarkable recent initiatives will give domestic uranium demand a serious jolt, as several new nuclear projects move past the drawing board. The Nuclear Regulatory Commission expects to receive 19 new plans for nuclear reactors by 2009, for a combined total of 28 proposed new units."