URANIUM 1.02% $24.70 uranium futures

new producers by 2011 and where is the demand

  1. 3,731 Posts.
    The coming years might be dominated by growing uranium supply from new production, increasing supply from existing producers, and stable secondary uranium supply. While the decommissioning of nuclear power is still going on, and sizable new demand will be years away.

    Do we really have uranium shortage?

    New Production

    1. Kazakhstan:

    The Kazakhstan new production capacity is well known, how much more by 2010-11?

    Using 2006 as benchmark, published by Stockinterview, it is about 7000t.

    Based on the latest UIC information, it could be easily 10,000t, or eqv. of the current uranium production from Australia.

    2. Namibia
    PDN, URAMIN, AND FORSYS will add 6000t

    3. Niger
    from Imouraren and Azelk, about 6000t

    4. Uzbekistan:

    Could be another 2000t

    5. Central Africa

    Bahouma 2600t
    Subtotal: 26,600t = 58.5mlb

    5. New production also are from South Africa, Australia, Canada, India, China, Russia, Iran, Pakistan, and the United States.

    7. The secondary supply is forecast to peak in 2010 at 70mlb, and gradually reduced to 60mlb in 2012, and 40mlb in 2015.


    Demand

    As we know, new reactors will take 7 to 10 years to build, and the world just start to build new reactors in large quantity.

    Conclusion:

    There is a situation of oversupply between now and 2013, taking everything in account.

    But companies tend to secure supply years ahead. so overall, I think:

    1. Long-term supply uranium price will stay around $95/lb. Actually decreased in gold's value, and spot price will be lower than long-term contract price for a period of time.

    2. Hedge fund's involvement is required to absorb the extra supply. But they might lose money if keep long position;

    3. Russian might corner the uranium market by buying the supply form all over the world, and to get even with the US after years of cheap supply.

    4. China's uranium supply is secured from multiple locations, inside and outside China. They will not spend like Areva, and only want to spend 10c for a dollar. On the other hand, India is in hot water.

    5. US is very lucky to have supply contract with Russia. It also has stockpile of nuclear warheads to dismantle. Their supply are secured by now.


 
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