Uranium
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How to Invest in Uranium in 2013
It's looking more likely that 2013 is going to be a profitable year for those who know how to invest in uranium.
That will be a nice turnaround from the past two years...
For the past couple years, the nuclear accident at Fukushima in Japan seems to have put the industry on ice as far as investors are concerned.
There has been little interest in most aspects of the nuclear industry, including uranium.
The price of uranium (U3O8) most recently hit a peak at $72 a pound in January 2011. It has been on a fairly steady decline since the Fukushima earthquake and is currently selling at a price of $40.00 a pound.
But the lights have not gone out for good...
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Unloved Uranium is About to Get Much More Attractive
Pity poor uranium -- there is perhaps no more unloved segment of the energy market right now.
Not only is it a commodity, but nuclear power has a stigma attached to it, thanks to the March 2011 Fukushima nuclear mishap in Japan.
Uranium has brought both joy and tears to investors over the past decade. After a 20-year bear market, the price of uranium (U308), bottomed in 2001 at $8 per pound. It then skyrocketed to over $100 a pound, only to fall back again.
Most recently, it peaked at $72 a pound in January 2011. The Fukushima earthquake and tsunami disaster a few months later put a pall over the industry and prices, resulting in the current price of $40.70 a pound.
Yet despite some countries slowing down their plans for nuclear power expansion and the negative mood hanging over the sector, uranium looks to be poised for a rebound in the not-too-distant future.
Why? Well, for one thing, the United Nations' nuclear agency - the International Atomic Energy Agency - said "The Fukushima Daiichi accident is expected to slow or delay the growth of nuclear power, but not reverse it."
The IAEA forecast impressive growth of somewhere between 23% and 100% in nuclear power capacity by 2030.
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Why Uranium Prices Are at a Critical Tipping Point
Despite the Fukushima disaster in March 2011, the demand for nuclear power continues to rise.
For uranium investors, that means the commodity is at a critical tipping point towards much higher prices.
Thanks to considerably higher energy costs, even Japan is now shifting its stance on nuclear power. According to Japan Today, newly elected Prime Minister Shinzo Abe now says he is willing to build new nuclear reactors.
That's a dramatic shift from the previous government's pledge to phase out all of the country's 50 working reactors by 2040.
But the most significant impact in nuclear power is likely to come from the developing world-especially China.
China's commitment to nuclear power means they could be adding as many as 100 nuclear reactors over the next two decades. That's a monumental shift considering China currently operates only 15 reactors.
Other nations such as Russia, India, South Korea, and the UAE are contemplating new nuclear power plants as well that would add to the 435 nuclear reactors already providing base-load power worldwide.
In this year alone, 65 nuclear power plants are under construction, another 160 new reactors are currently in the planning stages and 340 more have been proposed.
Given this ongoing shift, the demand for uranium is clearly going to be getting stronger, which presents a problem since there is already a uranium supply deficit.
According to the World Nuclear Association, total consumption of uranium was 176.7 million pounds in 2011 and growing. Meanwhile, last year's total uranium output was 135 million pounds. That's an annual deficit of roughly 40 million pounds.
Of course, you know what happens when supply can't keep pace with demand--- uranium prices will begin to rise.
But that's only part of the story. Thanks to the end of a program called Megatons to Megawatts the supply deficit promises to get even worse.
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Uranium Prices: The Top Three Ways to Play the Nuclear Power Surge
Uranium prices have gained more than 70% from their recession bottom. And that's only the beginning. The element is bracing for a super-surge, and we've found three ways to profit from this uranium bull market that could continue to rise through the rest of the decade and beyond. Uranium is heading back toward its historic [...]
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Uranium Prices Surge on China's $511 Billion Investment in Nukes
China's push for energy security is igniting a boom in the country's nuclear power plant construction, rekindling demand for uranium and leading its price higher.
China held its first International Nuclear Symposium on November 24-25 in Beijing. The meeting was packed with nuclear industry heavyweights scrambling for new contracts after the Red Dragon announced its intentions to spend $511 billion to build as many as 245 reactors in the next two decades - nearly doubling previous plans.
"Money is not an issue, which is different from the rest of the world. The Chinese have the capacity to deliver and they are deadly serious about achieving it," Steve Kidd, director of strategy and research at the London-based World Nuclear Association (WNA), told Bloomberg News.
President Hu Jintao said China aims to generate at least 15% of its energy from non-fossil fuels by 2020. Although the Chinese have invested heavily in wind farms and solar arrays, nuclear power is the only source of energy that could reach his goal.
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China Stockpiling Uranium in Rush to Build More Nuclear Plants
China is stockpiling uranium and purchasing the yellow metal in unprecedented quantities as part of its effort to build new nuclear reactors and provide electricity for its power hungry populace.
The nation may purchase about 5,000 metric tons of uranium this year, more than twice as much as it consumes, Thomas Neff, a physicist and uranium-industry analyst at the Massachusetts Institute of Technology in Cambridge, said in a July 6 telephone interview with Bloomberg News.
India and China are gearing up for the biggest expansion of nuclear energy since the 1970s oil crisis to cut pollution and supply their economies with enough fuel to keep them growing twice as fast as Europe and North America.
"They are essentially stockpiling in anticipation of new reactor build," said Neff, who is an independent director of GoviEx Uranium Inc., a privately held exploration company with interests in Niger. "They are stockpiling like crazy."
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China Deepens Ties with Iran and Venezuela In Spite of U.S. Consternation
Just as the United States makes an impassioned push for tougher economic sanctions on Iran, China is reportedly increasing its gas exports to the volatile Middle East nation.
Chinaoil- the state-owned China National Petroleum Corp's (CNPC) trading unit- shipped two cargoes totaling 600,000 barrels of gasoline to Iran in exchange for $55 million, according to Reuters. The cargoes were Chinaoil's first direct sales to Iran since at least January 2009, according to Reuters data.
Additionally, Unipec- the trading arm of the China Petroleum & Chemical Corp. (Sinopec) (NYSE ADR: SNP)- agreed to sell 250,000 barrels of gasoline to Iran.
The sales couldn't come at a worse time for the United States. Washington has spent months lobbying the international community to tighten sanctions on Iran, which is openly expanding its uranium enrichment capacity.
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Uranium's Price Surge Proves Costly for Areva
By Staff Reports French nuclear energy giant Areva SA (PINK: ARVCF) will pay 50% more for uranium mined in Niger, while investing more than $1.49 billion in the country's as yet untapped Imouraren deposit – possibly the second largest in the world – according to an agreement signed this week, Bloomberg reported. The price Areva [...]
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Outlook 2008: Continued Supply Crunches Will Add a "Glow" to Uranium Stocks
Editor's Note: This is the Sixth Installment of an Ongoing Series Highlighting the Global Investing Outlook for 2008 By Don Miller Contributing Writer Of all the commodities to ride the volatile global roller coaster in 2007, uranium had the wildest ride. Overall, it gained 28% for the year. But that seemingly simple statistic masks a [...]
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How to Profit from Canada's Commodity Boom
Canada's economy is on a roll and its underlying strength is primarily a commodities story. The main protagonists are uranium and oil, says Jody Clarke in a two-part series from our U.K. affiliate, MoneyWeek Magazine.Those commodities and more are causing investors to see green in the Great White North. [Editors Note: The First of Two [...]
