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
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21
Last Chance to GET FREE Money Crypto Mining with Your Desktop PC - 2nd May 21
Will Powell Lull Gold Bulls to Sweet Sleep? - 2nd May 21
Stock Market Enough Consolidation Already! - 2nd May 21
Inflation or Deflation? (Not a silly question…) - 2nd May 21
What Are The Requirements For Applying For A Payday Loan Online? - 2nd May 21
How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part1 - 1st May 21
INDIA COVID APOCALYPSE - 1st May 21
Are Technicals Pointing to New Gold Price Rally? - 1st May 21
US Dollar Index: Subtle Changes, Remarkable Outcomes - 1st May 21
Stock Market Correction Time Window - 30th Apr 21
Stock Market "Fastest Jump Since 2007": How Leveraged Investors are Courting "Doom" - 30th Apr 21
Three Reasons Why Waiting for "Cheaper Silver" Doesn't Make Cents - 30th Apr 21
Want To Invest In US Real Estate Market But Don’t Have The Down Payment? - 30th Apr 21
King Zuckerberg Tech Companies to Set up their own Governments! - 29th Apr 21
Silver Price Enters Acceleration Phase - 29th Apr 21
Financial Stocks Sector Appears Ready To Run Higher - 29th Apr 21
Stock Market Leverage Reaches New All-Time Highs As The Excess Phase Rally Continues - 29th Apr 21
Get Ready for the Fourth U.S. Central Bank - 29th Apr 21
Gold Mining Stock: Were Upswings Just an Exhausting Sprint? - 29th Apr 21
AI Tech Stocks Lead the Bull Market Charge - 28th Apr 21
AMD Ryzen Overclocking Guide - 5900x, 5950x, 5600x PPT, TDC, EDC, How to Best Settings Beyond PBO - 28th Apr 21
Stocks Bear Market / Crash Indicator - 28th Apr 21
No Upsetting the Apple Cart in Stocks or Gold - 28th Apr 21
Is The Covaids Insanity Actually Getting Worse? - 28th Apr 21
Dogecoin to the Moon! The Signs are Everywhere, but few will Heed them - 28th Apr 21
SPX Indicators Flashing Stock Market Caution - 28th Apr 21
Gold Prices – Don’t Get Too Excited - 28th Apr 21
6 Challenges Contract Managers Face When Handling Contractual Agreements - 28th Apr 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