Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Cameco and UEC Poised to Profit from a Nuclear Renaissance

Companies / Uranium Mar 21, 2012 - 05:36 AM GMT

By: Money_Morning

Companies

Best Financial Markets Analysis ArticleJason Simpkins writes: Uranium stocks got hammered last year in the wake of the Fukushima disaster.

But now, roughly one year later, uranium mining stocks have finally begun to bounce back... just like we told you they would.


After getting pummeled in 2011, shares of Cameco Corp. (NYSE: CCJ) - the world's second-largest uranium miner - are up 32% year-to-date.

Meanwhile, Uranium Resources Inc. (Nasdaq: URRE) and Uranium Energy Corp. (AMEX: UEC) are each up about 30% since the start of the year. And the Global X Uranium ETF (NYSE: URA) is up 25%.

But that's just the beginning.

These stocks are all still about 50% below where they traded prior to Japan's disaster.

And rising demand for nuclear energy and a dearth of uranium supplies will soon conspire to push these companies back to their pre-Fukushima levels.

You see, uranium miners cannot expand their operations - or even tread water - with uranium prices at $50.00-$60.00 per pound like they are currently.

They'd much rather have uranium prices of $70.00-$80.00 per pound. So right now there's not enough uranium being produced to keep up with growing demand.

About 170 million pounds of uranium was consumed last year, but only 140 million pounds was produced. And when you look at the way nuclear power projects are coming back online, it's obvious that the discrepancy will only get worse.

Global use of nuclear energy could increase by as much as 100% in the next two decades, according to the International Atomic Energy Agency (IAEA).

A Nuclear Renaissance
In spite of the Fukushima disaster, the number of planned nuclear plants in the past year rose to from 156 to 163. In fact, globally, the number of nuclear reactors is still on track to swell from 434 today to 820 by 2030. And 96 reactors are set to come online by 2021.

China will be the driving force behind this growth. China is the world's largest emitter of greenhouse gases, thanks to a battery of carbon-dioxide-spewing coal-fired power plants.

Indeed, coal supplies 80% of China's power. And the fact is, windmills and solar panels don't have enough juice to power a country home to more than 1 billion people and the world's second-largest economy.

That makes nuclear power the country's best option.

China is on track to build up to 100 nuclear reactors - nearly a quarter of the global total - by 2030.

Twenty-seven of those plants are already under construction, and an official recently told the China Daily that plans for "about 10" plants put on hold last year would soon be green-lit for construction.

China isn't alone, either.

Many other countries around the world are putting their nuclear power programs back on track.

India has announced plans to grow its nuclear power capacity from 5,000 megawatts to 63,000 megawatts by 2030. And even smaller countries in Europe, such as Poland, France, and Great Britain are pushing ahead as well - much to the consternation of some of their neighbors.

In fact, British Prime Minister David Cameron and French President Nicolas Sarkozy last month signed a joint declaration of cooperation on nuclear power. France already gets 75% of its power from nuclear plants.

And while other countries like Germany have decided to purge themselves of nuclear power, their boycott will have only a limited effect.

The IAEA says that an accelerated phase-out of nuclear power in Germany, a government review of the planned expansion in Japan, and temporary delays elsewhere in the world will result in only a 7-8% drop in projected demand growth for 2030.

Meanwhile, global usage of nuclear energy will rise 35%-100% by then.

That's good news for the long-term prices of both uranium and uranium mining stocks.

Cameco Corp. (NYSE: CCJ) and Uranium Energy Corp. (AMEX: UEC)
"Fukushima or no Fukushima, the world energy situation remains unchanged," Cameco CEO Tim Gitzel told the Canadian Press. "Huge quantities of huge, reliable and affordable electricity will be needed to meet future demand."

Since the 1980s, global electricity consumption has tripled and is expected to more than double again over the next two decades. Nearly two billion out of the world's seven billion inhabitants don't currently have access to electricity, Gitzel said.

"More reactors means more demand for uranium," he said.

Cameco intends to double its uranium production by 2018. And earlier this month the company agreed to buy AREVA SA's 27.94% stake in the Millennium project - a uranium mine in Canada's Athabasca Basin. That will increase Cameco's interest in the mine to 69.9%.

Cameco stock traded in the low-$40s prior to Fukushima and the mid-$50s when uranium prices peaked in 2007. So at its current level of about $23 a share, it looks like a bargain.

Another uranium miner trading at a steep discount is Uranium Energy Corp. Like Cameco, UEC is still 50% below its pre-Fukushima level even after an impressive surge to start the year.

UEC is the first company to start a new uranium mine in the United States in nearly six years. The Corpus Christi-based UEC aims to reach an initial production rate of 1 million pounds per year. Its processing plant in South Texas has the capacity to process up to three times that amount, which could nearly double what U.S. production is today.

Incidentally, U.S. regulators just approved the first new nuclear power station in more than 30 years - just as 15%-20% of the U.S. oil supply chain is being threatened by political disruptions in Iran.

Nuclear plants already produce about 20% of U.S. energy. In terms of uranium consumed by utilities, that translates into 55 million pounds of uranium per year. Currently, however, uranium mining in the U.S. only provides about 3.5 million-4 million pounds per year.

Both UEC and the Saskatoon-based Cameco will be prime beneficiaries of a nuclear revival. They're also major holdings in the Global X Uranium ETF.

Source :http://moneymorning.com/2012/03/21/germany-set-to-invest-260-billion-in-a-renewable-revolution/

Money Morning/The Money Map Report

©2012 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in