Uranium prices to increase 19% in 2011

Uranium prices will average US$52.25/lb next year, on behalf of an advance of 19% compared with 2010, according to a new report by Morgan Stanley. The mid to longer term price rises can be credited to an increasingly tightening demand-supply balance. Spot prices for uranium oxide this year through mid October average US$43.78/lb and for 2012, the company’s analyst Peter Richardson and Joel Crane predicted it could rise to as a lot as US$60. This year’s average is 6% below last year’s level and approximately 30% lower than the 2008 average. “The steady, two-year erosion in uranium prices has translate into difficult mining breakeven points, particularly for latest uranium projects,” the analysts said.

The fall in prices has made the world ever more dependent on Kazakh output, which reached 14.02Mt last year, efficiently knocking Canada of the top spot, according to the World Nuclear Association. Moreover, with new nuclear reactor capacity coming online in the stage up to 215, demand for fuel is expected to rise by 24%. And growth potential lies ahead for the longer-term as well as over the next decade, an extra 147 nuclear plants are planned to come online, according to Morgan Stanley. Their fuel necessity is estimated to be around 32,900t of nuclear fuel. It is envisage that most of this order will have to be met by mines as secondary supplies from recycled Russian warheads may cease as an international conformity expires in 2013.