Yes stockgirl is right. In the uranium report it mentions Chinese stockpilling. Old news but relivant.
2009-04-03 15:00:00
https://www.commodityonline.com/news/Hot-Commodity-%E2%80%98Uranium-will-touch-$100%E2%80%99-16633-3-1.html
TER: You used the term “sovereign stockpiling” of uranium. So India isn’t the only country doing the stockpiling.
GT: No. And it isn’t only uranium. The Chinese, for example, have said that they’re obviously stockpiling oil right now. They’re actually just commissioning one of the world’s largest storage facilities for oil. In the same announcement, though, the Chinese said that they’d be stockpiling oil as well as other forms of energy. They have coal already and natural gas is not easy to store, but uranium is one of the easier ones to go out and buy and stick away in a strategic stockpile. Given that China has quite an aggressive build of power plants over the next several years, I wouldn’t be at all surprised to see China build up a significant stockpile.
TER:Currently we’re seeing this spread between spot and the term price that a utility would pay. Spot is low because of the hedge fund selling, but you think that’s drying up. So where do you see the spot price and term price ending this year? What direction? What magnitude? And what are you looking at for 2010?
GT: For this year I expect the term price to drift down to $65 per pound or thereabouts, but the spot price to move upwards and end the year very close to the term price. So right about $65 by the end of the year. And then going into 2010, I’m looking at $70, then $80 the year after that.
I think prices will move back up to $100 per pound over the next five years. Come 2013, the agreement to dismantle nuclear weapons expires.
TER: That’s between Russia and the U.S?
GT: Correct. It’s called the HEU Agreement, the Highly Enriched Uranium Agreement, and when that expires, it will leave a 30-million-pound gap in supply. A nuclear power generator that’s just spent several billion dollars adding another couple of reactors will want to be sure of a uranium supply, so it’s in their interest to foster new supply before 2013.
TER: A couple of weeks ago, a Japanese consortium and Mega Uranium Ltd. announced an agreement to joint venture on Mega’s Lake Maitland project in Australia. Will we see more deals like that?
GT: Yes. Another one is Korea Resources.
TER: So might we see sovereign governments themselves, particularly the ones we’ve talked about, buying uranium? Would you expect an increase in countries actually buying in this sector of the market?
GT: Yes, and I think it’s a wise thing for them to do. If they can’t rely on their own corporations to ensure supply, they’ll probably step in.
Most countries, though, leave it up to the private corporations to ensure supply. For example, the Ontario government’s unlikely to intervene to ensure that Bruce Power, which is a private partnership, has supply. The partnership owns the power station; it’s up to them to make sure they have the fuel necessary to run it.
TER: Is enough mining underway currently to fill that 30 million pound supply gap? Or will there be a shortfall of supply for a certain number of years?
GT: Right now it looks like there’ll be quite a shortfall.