THE fallout from Japan?s nuclear crisis will hit global demand for uranium, but will also negatively affect supply and the uranium market will remain in deficit from 2011 up until 2020.
That?s according to RBC Capital Markets analysts Adam Schatzker and H Fraser Phillips who ? in a recently published research report ? predicted uranium prices would start to recover in the second half of 2011.
They said: "Based on our forecast of available uranium supplies (mine sourced and non-mine sourced) we do not think that there is sufficient uranium to cover the needs of 2018 to 2020, and certainly not beyond that time frame.
"As a result we expect that, at some point in the next 12 to 18 months, utilities will begin to see an increasingly tight long-term contract market to the point where there is all but no supply availability. This, in our view, will be the stimulus that will cause the uranium price to recover."
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?We think that in late 2011 utility requests for contracted material in 2016 and beyond will be met with fewer and fewer offers, and then perhaps none.
?We believe it is this sequence of events that will provide a significant stimulus to both the spot and term prices and bring them to a level that is sufficient to incentivise new exploration, development and, eventually, production.?
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