nuclear-news

Last week’s 14% rise in the price of the nuclear fuel took most observers by surprise though when
analyzed it seems that the much of rise in the short-term price from $36.75 a pound to $42/lb was in a category called dead-cat bounce.

For anyone unfamiliar with market slang a dead-cat bounce is the height a cat rises off the footpath after falling 20 floors – it’s an irrelevant recovery, and the cat’s still dead………

even as Japan re-fuels its fleet of nuclear reactors, and China presses ahead with a major nuclear building program, there are four reasons to be cautious about the uranium outlook, and even more wary of uranium exploration and mining companies.

Firstly, there is a global energy glut with prices for oil, coal and gas depressed by an over-supply of all fossil fuels hitting a sluggish global economy.

Secondly, the uranium market is divided into three distinct categories of short, medium and long-term and what happened last week was a sharp price movement, in very thin trading, at the short end of the market with no price change, yet, in medium or long-term pricing.

Thirdly, there is no shortage of uranium in the world, and while squeeze points could develop, such as Russia withholding high-grade fuel in a tit-for-tat reaction to the sanctions slowing its economy, there is plenty of other material available.

Fourthly, most uranium mines still in the planning stage require a price of at least $60/lb to be profitable, or attract the finance to fund their development.

Other factors weigh on the uranium industry, including a long line of projects-in-waiting which were taken through to the planning stage a decade ago when the price hit $135/lb but cancelled when the price collapsed……..

Of all the problems confronting uranium, and a reason to stay clear, the biggest is the energy glut and the fact that most alternatives forms of power are easier to develop and require much less government scrutiny than nuclear power.

If the short-term price rises closer to the $60/lb mark it might be time to take uranium seriously, but only if the long-term price moves higher as well. http://www.forbes.com/sites/timtreadgold/2014/11/17/uranium-is-hot-but-not-for-investors/