A Commodities Market Rebound Investors Don't Want To Miss

Money Morning Article of the Week

by Peter Krauth, Money Morning

After four challenging years in the uranium space, there are finally signs suggesting this part of the commodities market is due for a recovery...

Uranium has been one of the worst performing commodities markets for years. Since 2011's pivotal Fukushima reactor leak, the price of uranium fell by more than half.

At best, uranium explorers and producers have gone sideways. At worst, some have gone under.

But we're at a pivotal point in this sector right now. Demand is about to jump, uranium supply outlook is getting tighter, and Japan's nuclear needs are coming back.

In fact, within the next two years, this commodities market is forecast to face a deficit scenario that will drive prices higher once again...

Commodities Market Focus: Uranium Demand Coming Back

In the wake of the Japanese tsunami that destroyed its Fukushima reactor, 54 of the country's reactors were shut down. That resulted in as much as 10% of world uranium demand disappearing.

But Japan has been gradually returning to nuclear power.

It's now four years later, and approval's been given to restart four reactors, with another nine awaiting the green light.

Since those events, there are now an additional 11 reactors under construction globally (totaling 69) and an additional 31 on order or in planning stages (totaling 183).

As you can see from those numbers, nuclear as a form of electricity generation has continued to grow, albeit at a slower pace than it was before. And it will keep growing.

Globally there are hundreds of new reactors either under construction or in planning stages. The United States is the largest consumer of uranium in the world, requiring more than 50 million pounds annually, yet producing only 4.7 million pounds domestically.

China consumes 19 million pounds per year, and that's expected to reach 73 million pounds by 2030. China, too, only produces about 4 million pounds annually.

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