uranium stocks etf
- Uranium Stocks to Benefit From Nuclear Resurgence (CCJ) (DNN)
- Cameco Corp. (NYSE: CCJ) and Uranium Energy Corp. (AMEX: UEC) Are Poised to Profit from a Nuclear Renaissance
- Uranium Prices – And Producers – Are Poised to Rebound
While the Fukushima nuclear disaster in Japan in March 2011 stirred a lot of talk about abandoning nuclear power, nations have since come to realize their energy needs can't be met without nuclear being part of the equation.
The Japanese blowout scared the public so badly, in fact, that many governments vowed to severely cut back on nuclear power. Germany said it would quit using it altogether.
But then reality struck.
Major export economies in Europe and Asia have energy-intensive industries that can't just dump nuclear energy overnight.
The best proof that nuclear is not going away is right in Japan, which already has been forced to restart two reactors, and more will be restarted soon.
The Prime Minister of Japan called restarting the reactors a "matter of national survival," because the high cost of imported liquid natural gas was crippling the economy.
And nuclear energy has proven itself to be a safe alternative to the smog-belching coal plants in emerging countries like China and India.
Even oil-rich countries like Saudi Arabia are building new nuclear reactors now -- a clear sign nuclear energy is here to stay.
Simply put, the world not only needs low-cost nuclear power - it needs more, not less of it.
And uranium is the only fuel that can possibly give billions of new consumers in energy-starved countries like India and China the power they need.
But now, roughly one year later, uranium mining stocks have finally begun to bounce back... just like we told you they would.
After getting pummeled in 2011, shares of Cameco Corp. (NYSE: CCJ) - the world's second-largest uranium miner - are up 32% year-to-date.
Meanwhile, Uranium Resources Inc. (Nasdaq: URRE) and Uranium Energy Corp. (AMEX: UEC) are each up about 30% since the start of the year. And the Global X Uranium ETF (NYSE: URA) is up 25%.
But that's just the beginning.
These stocks are all still about 50% below where they traded prior to Japan's disaster.
And rising demand for nuclear energy and a dearth of uranium supplies will soon conspire to push these companies back to their pre-Fukushima levels.
You see, uranium miners cannot expand their operations - or even tread water - with uranium prices at $50.00-$60.00 per pound like they are currently.
They'd much rather have uranium prices of $70.00-$80.00 per pound. So right now there's not enough uranium being produced to keep up with growing demand.
About 170 million pounds of uranium was consumed last year, but only 140 million pounds was produced. And when you look at the way nuclear power projects are coming back online, it's obvious that the discrepancy will only get worse.
Global use of nuclear energy could increase by as much as 100% in the next two decades, according to the International Atomic Energy Agency (IAEA).
Investors fear that the explosion and subsequent radiation leaks at the Fukushima nuclear power plant will force other countries to tighten restrictions, or worse, abandon their pursuit of nuclear power as an alternative source of energy.
But what if no such thing happens? What if the nuclear fallout in Japan remains relatively contained, and other countries around the world move ahead as planned with their atomic energy projects?