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.
The International Energy Agency estimates that in order to half greenhouse gas emissions by 2050, and that they consider is necessary to avoid a potentially disastrous rise in global temperatures, around 1400 operating nuclear power plants will be required worldwide.
With the surging price of oil having many analysts seeing $200 a barrel in the not so distant future this may be the time to be buying into the nuclear sector on the basis that it is the only realistic alternative to fossil fuels in meeting the world’s energy demands.
2007 saw prices in the sector advance rapidly only to fall back sharply as investors lost interest, took profits and found more promising commodities in demand.
A global economic slowdown may well lead to base and possibly precious, metals, suffering a sharp correction.
The importance of nuclear, the only viable substitute for carbon based energy, will not go away.
The growing urgency of a possible doomsday scenario will focus the minds of the world’s leaders whatever the global economic climate.