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« Is Cold Fusion the Future? | Main | New Nuclear Plants for Britain! »

Uranium: Survey Predicts Higher Prices Ahead!

RCR logo 02 June 2008

An Australian company, Resource Capital Research (RCR) believes that an expected improvement in the price of uranium is part of the reason behind an improving outlook for uranium stocks on both the Australian and Canadian exchanges.

A senior analyst for RCR, John Wilson, said that “positive market sentiment has returned, driven by indications the spot uranium price is about to head up, combined with relative stability in the equity markets following the sub prime rout.”

The survey goes on to say that the market valuation of Australian companies with one or more uranium projects (266 companies) is up 23% over the past month, up 12% over the past 3 months, and down 8% over the past 12 months. This is not dissimilar to what we have been witnessing on the Toronto Stock Exchange where a number of uranium stocks have demonstrated signs of life including one of our ‘buys’ Laramide which is up 60% over the last month.

There are two more interesting snippets in this article are as follows:

Firstly, America's Congressional Budget Office reported that nuclear power would be commercially competitive compared to conventional fossil fuel technologies at a carbon price of $US45/t. Rising prices of competing energy sources - both spot oil and thermal coal prices, which spiked over $US130/bbl and $US130/t respectively, reinforces the commercial potential of nuclear energy.

Secondly, Planned and proposed construction of new nuclear power reactors worldwide has increased "strongly" in the past two years. From January 2007 to May this year there was an increase of 89 reactors from 222 reactors to 311 reactors (+40%). This compares with 439 nuclear power reactors currently in operation and 36 under construction.

To read the article in full just click this link.

We are pleased to see that this is a positive view from the southern hemisphere and thank one of our readers, W, for alerting us to it.

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Reader Comments (1)

I hate to be a spoil-sport--I have U stocks that are down 75 % from a year ago and have held them in the desperate hope that what goes down may come back up, but :

1. a fellow-reader's comment about the cost of diesel making uranium too expensive to be mined did seem convincing ;

Stockwatch sent me this article which, while not uranium-bashing, is far less euphoric than that of the the newsletter to which I am replying; comments re the Stockwatch item (copyright Canjex Publishing Ltd., a fine publisher to patronize, i.e. be a customer of) would be welcome):

Post says Uranium One, others may see U price stability

Uranium One Inc (C:UUU)
Shares Issued 468,213,963
Last Close 5/30/2008 $4.98
Monday June 02 2008 - In the News

Also Cameco Corp (C:CCO) In the News

The Financial Post reports in its Saturday edition that uranium prices over the last 12 months have dropped from a record high of $135 (U.S.) a pound to $60 (U.S.) a pound. The Post's Peter Koven, writing in Trading Desk, wonders if the bleeding is over. Desjardins Securities analysts John Redstone and John Hughes think it is. They think prices will now settle down and average $60 (U.S.) in the long term, because supply and demand are finally moving into balance. However, they noted that there could still be plenty of volatility, as investment funds can hold up to 10,000 metric tonnes (KMT) of uranium, and any change in that "long" position could lead to turmoil in the spot market. In the shorter term, they expect that buying sentiment in the spot market could continue to be weak, as about 40 per cent of uranium mine production capacity under development is due on stream this year. At the same time, the global increase in demand is expected to be steady over the next five years, but not spectacular. Beyond that, the analysts noted that it is possible demand could accelerate as a new generation of nuclear power plants come on-line. They are still a little dubious about the so-called "nuclear renaissance."

© 2008 Canjex Publishing Ltd.

June 2, 2008 | Unregistered CommenterNeil Bishop

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