Nuclear Energy and the Supplies of Uranium: 2013

Yellowcake.  Image from wikipedia

Uranium is poised to rebound from a second annual decline as Japan considers restarting its atomic plants almost two years after the Fukushima disaster and China pushes ahead with the world’s biggest nuclear building program…A revival in demand from Japan is raising the prospect that supplies of the radioactive metal will shrink at the same time as China continues with a project to increase its nuclear power capacity at least fivefold by 2020. That’s a boost for uranium producers such as Perth, Australia-based Paladin (PDN) Energy Ltd. It’s also a blow for liquefied natural gas exporters including Qatar and Australia, which have helped plug Japan’s power shortage since the earthquake that led to the meltdown at the Fukushima Dai-Ichi plant in March 2011.,,,

The uranium forecasts for 2013 ranged from $45 to $62.60 a ton in the Bloomberg survey conducted Dec. 10 to Dec. 19. That compares with a three-year high of $73 in February 2011, according to data from Roswell, Georgia-based Ux Consulting, which advises the nuclear industry. The fuel averaged $56.80 in 2011 and was $43 a pound on Jan. 3.  The price plunged as low as $49.75 a ton in March 2011 after Japan’s biggest earthquake on record and a subsequent tsunami damaged reactors at the Fukushima site run by Tokyo Electric Power Co. (9501), releasing radiation and causing the evacuation of 160,000 people. The government responded to the disaster by keeping all 54 of the nation’s then-functioning atomic plants shut after safety checks, while countries from China to France reviewed their nuclear policies and Germany said it would close its facilities….

Speculation that uranium demand will rebound has grown since Dec. 16, when Japan’s Liberal Democrat Party won a landslide election victory. The previous administration of the Democratic Party of Japan, which ordered the shutdowns, planned to phase out nuclear power by the end of the 2030s…

Stockmarket investors have been betting that the resumptions will occur and boost uranium demand just as China pushes on with plans to build at least 26 new reactors. At the same time, analysts are predicting a drop in the price of LNG as Japan’s utilities seek to reduce their electricity-generation costs by switching back to nuclear.

Paladin, which operates two uranium mines in Africa and has exploration assets in Australia, rose 22 percent in Sydney in the two days through Dec. 18. Energy Resources of Australia Ltd. (ERA), whose Ranger mine in the Northern Territory produces about 10 percent of the world’s mined uranium, advanced 13 percent over the same period. Australia has the world’s largest known deposits of the fuel, according to the World Nuclear Association.

The cost of Japan’s LNG imports almost doubled in the past three years, reaching a record $18.07 per million Btu in July, according to Finance Ministry data. Purchases for the first 11 months of last year increased 11.5 percent from the same period in 2011 to a record 79.5 million tons, according to data from the ministry….The country must restart reactors quickly because of the price of fossil fuels, LDP General Council Chairman Hiroyuki Hosoda said Nov. 27.

Ben Sharples. Uranium Rebound Seen as Japan Considers Nuclear: Energy Markets, Bloomberg, Jan. 4, 2012

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