Perhaps just positioning ! I spotted this on another post.
Wall Street Access Introduces Major Report on Uranium Supply and Demand
In-Depth Analysis Examines More than 440 Reactors and 45 Mines
NEW YORK--(BUSINESS WIRE)--Wall Street Access, a leading research and brokerage firm catering to institutional and high net worth investors, this morning introduced a major new report entitled Uranium Supply and Demand – the Long Cycle. The report finds that uranium demand is steadily growing due, in part, to significantly increased consumption in developing countries, and that supply may fall short of demand in the short term. Moreover, the report states that the industry’s extreme concentration means any shift in supply/demand can cause major price shocks.
Wall Street Access took a granular approach to building up a supply/demand forecast for uranium to 2020, culled it from 10 statistical sources, and shaded estimates up or down based on the firm’s own interviews and inspections. As a result, the report contains one of the most complete and current data bases on uranium supply and demand available to investors today.
The report projects demand reactor-by-reactor, country by country, and year by year, taking into consideration several variables including, among other things, reactor designs; maintenance schedules; “load” factors; and decommissioning dates. There are 440 reactors now in operation worldwide with another 112 either under construction or under active consideration. The report also projects uranium mine supply (mine by mine) based on analysis of a number of variables for about 45 mines around the world.
General conclusions of the analysis are:
1. After a 20-year period of dormancy, reactor orders are on the rise because of nuclear’s low operating costs, grid reliability, and zero carbon footprint. Nuclear may be the best new source of power for an electricity-hungry world. We see uranium demand growing by 2.5-3.0% per year between now and 2015. Developing countries, which today account for 15% of global uranium demand will account for 53% of incremental consumption in the period 2006-2020.
2. New uranium mine development was forgotten during uranium’s long price drought (1980-2003). That fact, combined with the “arsenal overhang” that resulted when Russia and the U.S. downblended nuclear warheads into utility fuel after the Cold War, gave the nuclear industry no reason to invest in new mines. Now miners are scrambling to keep up with demand. Given time, the supply problem will resolve itself, but that could be 10 years, as new mines are nearly as hard to authorize and build in many places, as are nuclear reactors.
3. Uranium supply (primary and secondary material) could fall short of demand by 14,000 tons per year out to 2012. The gap will be filled by inventory liquidation (enrichment tailings, ore tailings, and strategic stockpiles) and other tactics (perhaps longer refueling cycles) but uranium prices are likely to remain quite high – though very volatile – by historical standards. We believe than uranium yellowcake will trade in the $75-125 per pound level through the next several years, though it could easily spike or sag out of that range at least temporarily.
“Price volatility is a natural outcome of the highly concentrated nature of this industry,” said Bernard J. Picchi, Senior Managing Director, Energy Research at Wall Street Access. “The oil and gas industries have thousands of fields and billions of consumers. By comparison, just six mines (run by five companies) have 60% of the world supply of primary uranium, and 440 reactors (controlled by about 80 utilities) represent the uranium market. Given this extreme concentration, any shift in uranium supply/demand can cause price shocks akin to the movement of tectonic plates.”
The report complements Wall Street Access’ March 22 report, Uranium and Nuclear Energy Industries: Achieving Critical Mass in which the firm introduced research coverage of the nuclear sector and several stocks. To purchase a copy of the report, please contact Sean Kelleher, Managing Director of Institutional Sales and Trading at [email protected] or 212-709-9531.
The information and opinions set forth herein have been prepared by Wall Street Access (“WSA”), a U.S. registered broker dealer, and a member of the NYSE, NASD and SIPC. Although the information upon which this material is based has been obtained from sources which we believe to be reliable, we do not warrant its completeness or accuracy. Any opinion or estimates constitute our best judgment as of this date, and are subject to change without notice. This correspondence is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of any security or investment. WSA or any person associated with WSA may have held or may currently hold a position, and may buy or sell any such securities or investments mentioned in this report.
About Wall Street Access
Wall Street Access' Institutional Services division provides value-added security analysis, regulatory updates, as well as discreet and anonymous execution of stock and option strategies, including large block trades. In addition, Wall Street Access Institutional Services provides hedge funds and other institutional investors with a steady stream of research across the healthcare and energy industries. The division also provides research on mergers, acquisitions and special situations opportunities, such as hostile offers and business segment divestitures.
Headquartered in New York, Wall Street Access is an independent securities firm that provides clients with institutional brokerage, securities research and wealth management services. The firm's major focus is on research and trade execution in equity, options and investment grade fixed income securities. Its clients are primarily hedge funds and other institutions as well as high-net-worth individuals. Founded in 1981, Wall Street Access is a member of the NYSE, NASD, ISE and SIPC. The Wall Street Access web site is located at www.wallstaccess.com. Wall Street Access's Institutional Services division clears trades all transactions through Pershing, LLC.
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