Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
FED Balance Sheet Current State - 5th Mar 21
The Global Vaccine Race Against Time and Variants - 5th Mar 21
US Treasury Yields Rally May Trigger A Crazy Ivan Event (Again) In Stock Market - 5th Mar 21
After Gold’s Slide, What Happens to Miners? - 5th Mar 21
Racism Pandemic Why UK Black and Asians NOT Getting Vaccinated - NHS Covid-19 BAME - 5th Mar 21
Get Ready for Inflation Mega-trend to Surge 2021 - 4th Mar 21
Stocks, Gold – Rebound or Dead Cat Bounce? - 4th Mar 21
The Top Technologies That Are Transforming the Casino Industry - 4th Mar 21
How to Get RICH Crypto Mining Bitcoin, Ethereum With NiceHash - 4th Mar 21
Coronavirus Pandemic Vaccines Indicator Current State - 3rd Mar 21
AI Tech Stocks Investing 2021 Buy Ratings, Levels and Valuations Explained - 3rd Mar 21
Stock Market Bull Trend in Jeopardy - 3rd Mar 21
New Global Reserve Currency? - 3rd Mar 21
Gold To Monetary Base Ratio Says No Hyperinflation - 3rd Mar 21
US Fed Grilled about Its Unsound Currency, Digital Currency Schemes - 3rd Mar 21
The Case Against Inflation - 3rd Mar 21
How to Start Crypto Mining Bitcoins, Ethereum with Your Desktop PC, Laptop with NiceHash - 3rd Mar 21
AI Tech Stocks Investing Portfolio Buying Levels and Valuations 2021 Explained - 2nd Mar 21
There’s A “Chip” Shortage: And TSMC Holds All The Cards - 2nd Mar 21
Why now might be a good time to buy gold and gold juniors - 2nd Mar 21
Silver Is Close To Something Big - 2nd Mar 21
Bitcoin: Let's Put 2 Heart-Pounding Price Drops into Perspective - 2nd Mar 21
Gold Stocks Spring Rally 2021 - 2nd Mar 21
US Housing Market Trend Forecast 2021 - 2nd Mar 21
Covid-19 Vaccinations US House Prices Trend Indicator 2021 - 2nd Mar 21
How blockchain technology will change the online casino - 2nd Mar 21
How Much PC RAM Memory is Good in 2021, 16gb, 32gb or 64gb? - 2nd Mar 21
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Utilities Companies Quietly Worry about Uranium Supply

Commodities / Uranium Apr 15, 2007 - 11:17 AM GMT

By: James_Finch

Commodities According to Friday's Nuclear Market Review (NMR), many market participants were left stunned by the recent record jump in the weekly spot uranium price. The market has increasingly diverged between those who have U3O8 and those without. Utilities with existing supply contracts “are heaving a sigh of relief,” NMR editor Treva Klingbiel wrote. And those trying to find uranium in today's climate “are forced to face the reality of a seller's market,” she said.

Is there pity for one market participant, who is now scrambling for ‘very near term delivery' of nearly 500 thousand pounds U3O8? Probably not. This buyer must compete with 7 others hoping to secure about 3.2 million pounds of U3O8 equivalent.


NMR reports, “Sellers remain reluctant to sell significant quantities today.” By waiting longer, sellers expect to get a higher price for the material they hold. After the previous week's astonishing price jump, the spot uranium market “was exceptionally quiet,” according to Klingbiel. The spot uranium price indicator remained unchanged at US$113/pound. TradeTech posts changes in the weekly spot uranium price on the consulting service's website, at www.uranium.info

Utility Pricing Climate

Utilities remain skeptical about the long-term pricing of uranium. This weekend's Barron' article, about the crisis nuclear utilities face, quotes Exelon Corp's (EXC) Tom Malone and Entergy's (ETR) Frank Rives. Both believe uranium pricing should ‘settle down.' Malone quoted a long-term uranium price of $40/pound. Utilities accustomed to lower pricing levels and wishing for uranium's return to a more advantageous price level for themselves, may be waiting for more than a few years. In conversations we had with TradeTech's Gene Clark, equilibrium might not take place until 2017.

We provided TradeTech's Uranium Price Forecast through 2008 in Chapter Two of our soon-to-be-released Uranium Outlook publication. Going out further, uranium production should not reach 230 million pounds U3O8 until about 2017. And there are many disturbing developments in numerous areas, which could substantially lower this production forecast. Foremost are the difficulties BHP Billiton (BHP) may have in transforming Olympic Dam into an open pit uranium mine.

Some utilities are again taking the wait-and-see attitude about higher uranium costs. This strategy has backfired over the past year because a number of countries planned to increase or add civilian nuclear power programs. Now the Arab Gulf States want nuclear energy, adding to the number of countries seeking to obtain uranium. “Everybody's going for nuclear programs,” Jordan's King Abdullah II told an Israeli newspaper.

Against the advice of some experts, we included a special section in our publication, “Investing in the Great Uranium Bull Market,” predicting a rise of civilian nuclear energy in the Middle East. Turkey plans three nuclear reactors, hoping to start construction later this year on the first one. After Russian President Putin visited Saudi Arabia in February, offering ‘nuclear aid,' will U.S. utilities now also be forced to compete for Kazakh uranium against the Arab Gulf States? It appears global deals are being arranged on a country-to-country basis, and U.S. utilities are coming up short.

Environmentalists: Nuclear Friend or Foe?

This past week, Jim Marston, the Texas director of climate initiatives for Environmental Defense told the ‘Living on Earth' environmental show, “We have come to the conclusion that the threat of global warming is so severe and the time for action is so short that we have to look at all low carbon options again including nuclear.” His comments were broadcast on more than 300 public radio stations in all fifty states across the U.S. The show's theme was entitled, “TXU Turns Nuclear.”

Does this mean environmentalists are switching to nuclear energy? No. Some still cling to atavistic attitudes. One environmentalist interviewed compared a switch to nuclear on par with giving up cigarette smoking and taking up crack.

But, environmentalists influenced TXU's business model, eliminating the construction of eight new coal-fired power plants. According to the show's news reporter, “Environmental groups opposed to the utility's plan for new coal plants launched a fierce legislative and legal campaign. That drove down the price of the company's stock, and made TXU a tempting takeover target.” And taken over it was, but the company also negotiated with environmentalists by offering renewables, energy efficiency incentives and mandatory caps on greenhouse gases.

TXU spokesman Tom Klekner was also interviewed on this radio show. He pointed out that TXU's power reserve margins were below the minimum of acceptable levels. The spokesman insisted five new nuclear plants were needed. After TXU was taken over, the company announced plans to build the two largest nuclear reactors in the U.S.

Across the country, in New Jersey, state environmentalists are arguing about the NRC's plans to grant a twenty-year license extension to Exelon Corp's Oyster Creek Salem 1 and 2 plants. They are demanding the state revise its nuclear emphasis on the Corzine Administration Energy Master Plan. The plan calls for obtaining twenty-year extensions on all of the state's nuclear power plants. As one alternative, they suggested building more windmills off the Jersey shore by 2020. A wind farm currently operates in often-breezy Atlantic City, where casinos are also located.

Oyster Creek is the country's nuclear plant still in service, according to the U.S. Energy Information Administration. Nuclear energy generates about one-half of the state's electricity. More than 25,000 million kilowatt hours are generated each year through New Jersey's four nuclear reactors. It is likely environmentalists will do little more than argue about nuclear as New Jersey also has plans to use more coal.

The news media climate about nuclear has rapidly changed over the past five years. Hardly a significant news item was a transformer fire about 40 miles north of New York City at Entergy's Indian Point 3 reactor. The reactor could be offline for about two weeks, and the NRC plans on tightening their plant inspections. This was the fourth unplanned shutdown since July.

Another step back for Entergy could be a Sunday deadline to pass NRC muster on their emergency siren warning systems. Only 31 of 150 sirens in three counties failed the test, but that's not good enough for the NRC. The regulatory agency demands a 90-percent success rate. While the utility can request another 75-day extension, NRC spokesman Neil Sheehan announced approval would not be automatic.

These evidences confirm what we have suspected for some time. Regulatory agencies, not the environmental movement, have stepped in to prevent a Three-Mile Island repeat. Over the past thirty years, regulation of nuclear power has evolved above the level of Homer Simpson satire. Engineering developments and safeguards are steeped in sufficient layers of protective bureaucracy to avoid another serious nuclear accident. Science has replaced rhetoric when bringing about changes in the nuclear industry.

With this in mind, environmentalists could better serve the citizenry by focusing their attention on coal-fired power plants, which reportedly exude more radioactivity than nuclear plants. Yes, coal beds commonly have uranium in their composition. No ‘nuclear safeguards' have yet been applied to burning coal. Perhaps environmentalists should chase this ball of yarn if they are indeed sincere about carbon emissions, global warming and abrupt climate change.

Next month, the number of U.S. nuclear reactors should increase by one to 104. The dormant Unit 1 reactor at Browns Ferry in Alabama will get its final inspection. TVA (TVE) hopes to restart the reactor in May. The nuclear unit has not been operational for more than two decades. The nuclear renaissance is alive and well in the U.S., not just overseas.

Australian and Canadian Uranium Stock Indexes Set Record Highs


Matthew Smith of TheInvestar reports his Australian uranium stock index closed at an all-time high this past week. The Canadian uranium stock index closed a few points below its record high set earlier in the week.

Smith observed AREVA's developments in Australia. In an email, he wrote, “With AREVA being so active right now in Australia this tells us:

• They think the 'Three Mines Policy' will be overturned at the end of the month.

• There is a higher risk for the Athabascan mines than Cameco (CCJ) is letting on. Therefore, AREVA (whose subsidiary is an owner, through joint ventures, of many of the mines there) is diversifying and spreading their risk over many future deposits and mines.

• They see increased demand in a large way down the road. AREVA would not be buying if they could not justify this. The larger miners are generally very conservative. American and Australian deposits are where the big boys will go first when buying. Then, they will gradually gravitate to the more speculative plays in Athabasca and elsewhere.”

By James Finch

http://www.stockinterview.com

COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED
James Finch contributes to StockInterview.com and other publications. His focus on the uranium mining and nuclear fuel sector resulted in the widely popular “Investing in the Great Uranium Bull Market,” which is now available on and on http://www.amazon.com The weekly spot uranium price is posted on the TradeTech website every weekend at http://www.uranium.info


© 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

6 Critical Money Making Rules