Uranium prices to rebound as Japan disaster memories fade

Uranium prices slumped in the come around of the nuclear disaster in Japan earlier this year, but it looks like any price fault in 2011 will be short-lived as memories fade and demand for electricity continues to grow. Adam Schatzker, forecaster with RBC Capital Markets, notes that China, India and South Korea are maintain their nuclear build plans even as Saudi Arabia, the United Arab Emirates, Turkey and Vietnam include announce new nuclear plans as well.

“The market will start in on to recover in 2012 as the events at Fukushima become less of a driving force and the supply-demand essentials re-assert themselves,” he said in a note. “There is not enough uranium production, either current or planned, to gratify reactor needs, initial core requirements and inventory for new reactors. A sustainably higher cost should help resolve this gap.”

Germany’s threats to shut down all of its reactors will be upturned, and the threat of Japan final its reactors are unlikely, his said.Mr. Schatzker forecasts uranium prices to be range-bound at less than US$60 a pound for the rest of 2011 and may yet drop under US$50 a pound depending on what Japanese utilities do with planned deliveries for the remainder of the year.