From Globe & Mail -Mon Sept 11Uranium price could reach $70 (U.S.): CIBC World Markets
Canadian Press
Toronto — Demand for uranium fuelled by Asia's energy needs and a nuclear power plant construction boom will likely push the radioactive ore's price up to $70 (U.S.) per pound by the end of 2007, according to a report by CIBC World Markets.
The bank's monthly indicators report said uranium prices have increased seven-fold in the last five years and demand threatens to consume global supply.
“Just like we have seen with oil, the appetite for uranium to feed the rapidly growing energy needs of the burgeoning Chinese and Indian economies is straining supply and driving prices up,” chief strategist Jeff Rubin said in a statement.
The report said surging electricity demand, rising fossil fuel prices and concerns over greenhouse gases have brought about a resurgence in nuclear energy and 80 new reactors are under construction or approved worldwide, more than half in Asia.
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The spot price for the nuclear reactor fuel uranium oxide hit a record $52 per pound this month and uranium prices have increased at a far faster pace than the price of oil.
But, the report noted, “while at absolute record highs, the real cost of uranium remains below the prices set during the two main nuclear post-war booms of the 1950s and 1970s.”
Asia will likely surpass the U.S. in installed capacity and uranium consumption in the next five to 10 year, the report said, and new demand will outstrip supply within the next decade if new sources are not developed.
“Mine production supplies only 62 per cent of the uranium used today,” said Mr. Rubin.
“The rest comes from a variety of other sources such as natural and enriched uranium inventories and the reprocessing of spent reactor fuels — and supplies from these secondary sources are steadily declining. Increased demand from Asia will continue to put pressure on prices and the need for more rapid mine development.”
Canada is the world's largest uranium producer at just under 12,000 tonnes per year