My oh my, Fluffy - you ARE bearish on uranium, aren't you?...

My oh my, Fluffy - you ARE bearish on uranium, aren't you? ;)

France has around 80% of its power coming from nuclear, and has been since 1978. They have been through a succession of governments since then.

What do you suggest they will do to replace the ones you think they'll shut down? Coal?

Germany is quietly reneging on its "promise" to shut down nuclear plants (they said previously they were going to do that, then changed their mind when they realised they needed them). Also, Germany will be buying power from France next door - who are looking at building one or two nuclear power plants close to the border specifically for that purpose. So technically, Germany will just be buying power into their grid, but the net result in terms of uranium use will be increased.

Japan will gradually re-start those plants it closed down - they are desperately short of power already.

China - and India - will come on line with about 30 new plants in the next 1-2 years, with another 33 still being built around the world.

Saudi Arabia is building 16.

Spot sales of uranium (and hence the spot price) is a very small part of the global uranium trade, and consists largely of facilities "topping up" their inventories, or speculators (including hedge funds). Even Paladin has been a buyer on the spot market to top up supplies to fulfil contracts.

I'm sure you're aware that most of the nuclear power plants around the globe buy their uranium at long term contract prices in order to ensure continuation of supply.

The focus on the spot price is natural in the market, as spot prices assume much more importance with most other commodities, such as gold, copper, etc. But uranium is different, and the spot price really doesn't affect the longer term financials of most of the major suppliers such as Cameco, Areva, Paladin, etc.

I'm more bullish than you are - I think the uranium market is shaking off the effects of Fukushima (unless another "Black Swan" event happens) and reality is gradually overcoming the emotion and irrationality.

But, as always, time will tell.... ;)