Some interesting reading http://www.uraniumseek.com/news/UraniumSeek/1250193204.php parts thereof...The bottom line is the vast majority, if not all, nuclear reactor construction projects have gone ahead. Those are in China and India, and they are either state or quasi-state sponsored projects. Moreover, this year China added three new reactor projects, to 24 under construction, with its stimulus funding. China currently has only 11 nuclear reactors.
People's tendency to think in absolutes misses the real point about demand growth—over the last year, what the private sector took (if any), the public sector more than gave. Largely, unlike other commodities, the credit crunch effects on the private sector did not hit uranium's fundamentals. I am minimally concerned if U.S. reactor projects are delayed because those are 10 to 12-plus year project completions. What I do care about are China and India's ("Chindia") much nearer term reactor projects—those are four to six year and current uranium demand situations, respectively. Those are the main uranium secular drivers—and the truth is both actually got better. I want to emphasize that the only thing better than bullish supply and demand factors are exogenous events. Both China and India have recently had favorable exogenous events that will greatly affect uranium demand. Both are seeking to buy well beyond current needs.
Only this year India entered the spot market after a 34-year Nuclear Suppliers Group embargo (due to India's 1974 nuclear test and refusal to sign the Non-Proliferation Treaty). India is not only seeking uranium for it is current needs, but also after years of shortages and a strong national sentiment towards nuclear sovereignty, is seeking to buy sufficient uranium for all reactors for the entire service life of those reactors. Needless to say, that is and will be quite a bit of additional uranium demand. Investors should note, that was not factored in the market one year ago; it is a new and significantly bullish event.
World electricity growth is forecast to grow 85% by 2030. Approximately 4%/yr. 435 current reactors supply 370 Gwe and require 78,500 tonnes of uranium oxide 31 reactors under construction—approximately 27 Gwe 222 planned & proposed—187 Gwe Each additional Gwe requires 195/t year of uranium and 3X for initial load. Uranium production has to ~ double (on current consumption) to offset TENEX end in 2013 (if Russia does not replace any TENEX uranium supplies). Source: World Nuclear Association; Merrill W. McHenry
AGS Price at posting:
74.0¢ Sentiment: Hold Disclosure: Held
