Uranium continues to be the one commodity to have missed out on the recent boom, although more nuclear power plants are under construction or in the planning stage than ever before. China alone is planning or constructing over two hundred plants.

No clear source of power generation clear of polluting carbon emissions and not dependent upon fossil fuels and that is capable of meeting ever increasing world wide demand has yet emerged to challenge the nuclear option. Nor are their any substantiated forecasts that any alternatives are in the pipeline.

The International Energy Agency estimates that just to only half greenhouse gas emissions, 1400 operating nuclear power plants worldwide will be required by 2050.

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There is no formal regulated market for yellow cake but indicated spot prices are off their June lows and uranium stays steady at around $64.50 a lb.  

Areva, the French nuclear company, has at last settled its dispute with the Central African Republic and has been given the go ahead to start delivering the yellow cake from its mine at Bakouma by 2010. Mining rights were originally granted to UraMin, an Anglo Canadian Mining company taken over by Areva in 2007.

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Europe stockpiles 2158 tonnes of natural uranium above the current yearly usage of 19,774 tonnes with the major share coming from Russia. Canada supplied 18%, Niger 17% and Australia 15%. 

If Europe is stockpiling does this now make Uranium a buy?

Global Uranium demand is seen as steady but the diversity between the spot price and forward contract prices raises uncertainty over the next moves.

For now we would only consider buying into a major producer and holding for the long term but if you fancy a gamble now might be a good time to pick out a junior miner with solid prospects.

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Shortage of Uranium has closed half of India’s nuclear power stations reports the 'Times of India’

The lack of supply appears to be politically inspired by the Communist Party of India vetoing the signing of an agreement to import uranium from the US and local authorities refusal to allow mining for the yellow cake where known deposits are known to exist in the Meghalaya region.  

A research company that specializes in small and mid cap equities has issued a report that expects a 25% upward correction in the price of uranium in the near future.

This positive outlook is due to a global increase in nuclear reactors to 311, up from 222 on stream in Jan 2007.

Add to this the many nuclear plants planned or under construction, particularly in China, the only surprise is that the uranium production and mining and nuclear construction sector has not continued the same upward price path of other commodities in demand.
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Turning to uranium, things are not looking too good in the short term according to the technicians.

Fibbonacci, MAs etc are all indicating weakness and fundamentally there is nothing much going on to contradict this outlook.

Sooner or later we think that the world is going to wake up to the fact that nuclear is the only viable energy replacement for the fossil fuels that continue to pollute the planet and, with the exception of coal, are a rapidly depleting resource.

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Not only are the hills of Donegal in Ireland renowned for their rugged and beautiful scenery but they also expected to have significant deposits of uranium

Irish Minister for Natural Resources has refused exploration licenses to two mining companies much to the satisfaction of the green party.
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Avira, the French nuclear power company will be supplying state owned China Guangdong Nuclear Power Corp with a minimum of 23,000 tons of uranium over the next 14 years. This is in addition to an annual 600 tons that had already been agreed.

The French company will build and supply two nuclear reactors in Guangdong.

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Australian business groups are calling upon the newly elected labor government to free up many of the restraints that have held up the countries economic development.

The executive director of the Australian Uranium Association (AUA) is quoted as saying “The removal of current constraints on uranium expansion is a business regulation issue which Mr Rudd (the new Prime Minister) has indicated is one of his main priorities “.

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The effect of futures trading in the energy metal has so far been subdued.

Bearing in mind that unlike other futures markets physical delivery cannot be made, the volume of trades during the opening week has been considered as reasonably optimistic for volume to develop.

Obviously the almost continuous price increase that uranium has enjoyed for the last 5 years has attracted speculators interest and that coupled with the much publicized growth prospects for nuclear power as a green alternative to fossil fuels is likely to awaken increasing interest on Wall St. and professional investors world wide.
 

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