Canada-India Deal To Boost Uranium Prices

 

Uranium Prices Boosted by Recent Canada-India Deal

 

“This contract opens the door to a dynamic and expanding uranium market.” Cameco’s (CCJ) CEO, Tim Gitzel, said that about his company’s new five-year deal with India.

On April 15, the Canadian uranium supplier solidified a deal to sell 7.1 million pounds of uranium concentrate to India through 2020.

Canada is the world’s second-largest producer of uranium, trailing only Kazakhstan.

This deal is just one of the many signs that Asia’s growing population is looking more and more to nuclear power as a viable source of energy to feed the region’s rapidly expanding economies and populations.

This trend has been reflected in the market. So far, the uranium spot price has outperformed the S&P 500 Index (SPY) this year. It’s near $40 per pound – an 11% increase this year and well above its low of $28 per pound, which it hit in mid-2014.

India, in particular, is desperately in need of power. It has one-sixth of the world’s population, and Prime Minister Narendra Modi is focused on nuclear power as a solution for India’s growing needs.

India already has 21 active nuclear power plants, but it only supplies 3% of the nation’s power needs.

Six new reactors are due to come online by 2017, and another 22 are in the planning stage. By 2032, India says its nuclear power capacity will rise from just 6,000 megawatts to 45,000 megawatts per year.

The six reactors under construction are known as the Jaitapur Nuclear Power Project. Once built, the 9,900-megawatt facility will be the largest nuclear power-generating station in the world.

This focus has pushed the country to the second-fastest-growing market for nuclear fuel, behind only China.

China Nuclear Power Capacity Still Expanding

China’s nuclear power program is moving full speed ahead, as well. Even with its economic slowdown, the country’s total power consumption rose by 4% in 2014.

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