Uranium Prices set to Rice
The uranium market has been due for a comeback since the 2011 Fukushima disaster, and many experts are pointing to a supply deficit by 2020.
However, in a report last week, Salman Partners said it sees uranium spot prices rising a lot sooner. Raymond Goldie, senior mining analyst at the firm, said spot prices are expected to rise from now until 2018 as a deficit in uranium eats through inventories.
"We refer to the day when security of supply becomes of concern to producers as the 'pinch-point TM.' We expect to reach the 'pinch-point TM' by early 2016, by which time we expect utilities to feel compelled to begin signing long-term contracts in order to ease concerns about security of supply, with those concerns -- and spot prices -- peaking in Q1 2018," Goldie states in the report.
He adds, "[a]fter that, we forecast prices to decline, from a 2018 peak of over US$70 per pound, to a long-term level of around US$50 per pound in 'real' 2013 dollars. Prices thereafter should be sustained by supply management on the part of producers."
Goldie told the Investing News Network that over the next three years, prices will move up to the $80 to $85 range before easing to around $70, as previously shuttered mines come back online. "The best cure for high prices is high prices," he pointed out.