It’s been a very tough few years for uranium. But it now looks like we’ve reached the bottom, and the future demand equation says there’s nowhere to go but significantly up. there are plenty of indications that the uranium recovery is already underway.
In this way, Uranium analyst David Talbot of Dundee Capital Markets is forecasting 6 percent compound annual demand growth through 2020, which is enough, he says, to “kick-start” uranium prices up to and beyond 2007 levels. Morningstar analyst David Wang predicts prices will double within the next two years.
Nuclear energy is rebounding as a cleaner power source with next generation safeguards. Moreover, it is impossible to find another natural resource that is so fundamentally necessary, the development in this sector is inevitable. Currently, the world is increasingly recognizing nuclear energy as the cheaper, cleaner, and greener option—as indicated by the number of reactors being built. In this way, according to Bloomberg, in Asia alone, approximately $800 billion in new reactors are being developed.
Now that enough time has passed since Fukushima, this negative sentiment is losing steam as it appears that Japan has succeeded in bringing some of its reactors back online – four of its reactors have already restarted operations. So the world is refocusing on what are arguably brilliant fundamentals, which actually have been there all along. A total of 65 new reactors are already going up, another 165 are planned and yet another 331 proposed. Due to low uranium demand, the producers have reduced their outputs. However, due to drastic increase in number of upcoming reactors the demand will suddenly increase. In this way, the current supply will not be able to meet the demand and there will be a spike in the uranium price.
Noticeable Investments in Uranium
Bill Gates: Bill Gate’s TerraPower company is developing a Fourth Generation nuclear reactor that would run on depleted uranium, rather than enriched uranium.
D.E. Shaw: He acquired 1.4 million shares in Cameco, eyeing rising uranium prices, tightening supplies and growing demand—and joining the ranks alongside George Soros.
Li Kashing: He would buy $60 million in convertible bonds from NexGen Energy targeting uranium projects in Canada’s Saskatchewan province through his CK Hutchinson Holdings and CEF holdings.
Content borrowed from: http://www.mining.com/web/uranium-prices-set-to-double-by-2018/