EARLIER this month, Global X Funds of New York publicize plans for two exchange traded funds one for gold stocks, the other, uranium. Primarily, Bruno del Ama, its chief executive, figured he knew which would capture the market’s notice. After all, gold prices have rush in recent months. As it transpire, he deduction wrong. Global X’s Uranium E.T.F. with holdings in companies like the Cameco Corporation, Paladin Energy and Uranium One was a hit as soon as it goes on sale Nov. 9, with early deal volume outpacing Global X’s gold E.T.F. by five to one. “I am in shock, to be truthful,” he said.
Mr. del Ama is scarcely alone. Uranium industry insiders were caught off guard by a deep run up in spot sells prices, which are now about $58 a pound, up stridently from the low $40s in the summer. “We all knew it was going to occur,” says Ron F. Hochstein, the president and chief executive of the Denison Mines Corporation. “We just didn’t expect it would happen this year.” As Adam Schatzker, a psychiatrist with the Canadian investment bank RBC Capital Markets, said in an equities research report available last week: “It show that the character of the spot market has changed markedly over the past little months from one that was heavily oversupplied with weak command to one that has high levels of demand with very little supply.”
The price surge hints at a confluence of important changes a “perfect storm,” in Mr. Hochstein’s words now sweeping through the global nuclear power industry, particularly in Asia. With China newly moving to accelerate sharply its nuclear building program by 2020 the showpiece is the 3,300 megawatt Taishan plant in Guangdong region, due to come online in 2013 the country’s nuclear utilities are currently trying to secure fuel supplies for years to come. On Nov. 1, China’s lengthy term planning agency announced that by 2020 it intended to raise nuclear power’s share of the country’s whole energy production to 112 gigawatts, or 7 percent, up from the previous target of 70 gigawatts. That translates into an extra 82 million pounds of uranium, according to RBC.
Mr. del Ama is scarcely alone. Uranium industry insiders were caught off guard by a deep run up in spot sells prices, which are now about $58 a pound, up stridently from the low $40s in the summer. “We all knew it was going to occur,” says Ron F. Hochstein, the president and chief executive of the Denison Mines Corporation. “We just didn’t expect it would happen this year.” As Adam Schatzker, a psychiatrist with the Canadian investment bank RBC Capital Markets, said in an equities research report available last week: “It show that the character of the spot market has changed markedly over the past little months from one that was heavily oversupplied with weak command to one that has high levels of demand with very little supply.”
The price surge hints at a confluence of important changes a “perfect storm,” in Mr. Hochstein’s words now sweeping through the global nuclear power industry, particularly in Asia. With China newly moving to accelerate sharply its nuclear building program by 2020 the showpiece is the 3,300 megawatt Taishan plant in Guangdong region, due to come online in 2013 the country’s nuclear utilities are currently trying to secure fuel supplies for years to come. On Nov. 1, China’s lengthy term planning agency announced that by 2020 it intended to raise nuclear power’s share of the country’s whole energy production to 112 gigawatts, or 7 percent, up from the previous target of 70 gigawatts. That translates into an extra 82 million pounds of uranium, according to RBC.
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