Uranium’s Glow Still Smothered By Safety Concerns

 

0515_COMM_Uranium_featured

 

Just when it looked like it was time to jump back into the uranium market, prices have faltered yet again.

Uranium prices have taken a turn for the worse due to a combination of factors that pulled the floor from underneath the commodity.

Back in November 2014, prices spiked from $28 per pound to $44 per pound. This was largely due to the sanctions imposed on Russia after the annexation of Crimea, thus portending a supply shortage.

But the price is currently close to $35 per pound. And technical indicators are pointing south once again.

Time to make a plan for this depressed commodity.

You see, the pro-nuke feeling persisted for many even with the 2011 Fukushima disaster still so fresh. Pre-Fukushima, uranium prices pole-vaulted to nearly $140 per pound on expectations of a growing number of reactors planned in China and other emerging markets, only to come crashing down soon thereafter.

Nuclear Power Loses Its Glow

So, why is the price continuing to drop?

Uranium Gets Nuked

Well, first, it appears that supply is plentiful.

You see, before 1993, the industry experienced a decade of falling mine production. But uranium output has risen since then and now meets over 90% of the demand for global power generation.

It also seems likely that the European Union will lift Russian sanctions by the end of the year, allowing supply to flow west once again.

You see, Europe imports 95% of its uranium, according to the European Commission. And, even though Germany and Switzerland have abandoned nuclear power, Europe is still largely dependent on Russian uranium, among other exporters.

Second, the industry is forever finding cracks in its safety walls.

While France has long been seen as the world’s leader in building and safely operating nuclear reactors – not only in its own country, but around the world – it has recently made a series of missteps that have damaged the country’s reputation.

You see, France gets 77% of its electricity from nuclear power, according to the International Atomic Energy Agency. That’s a higher proportion by far than any other nation. And the country ranks second in terms of number of reactors with 58. The United States is first with 100.

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