Ur at $125 in 2010?Uranium to Top $125 a Pound by 2010: Analyst
Friday December 8, 12:35 pm ET
BALTIMORE, MD--(MARKET WIRE)--Dec 8, 2006 -- Uranium prices have now ballooned over 70% for the year. Over the past three and a half months alone the nuclear fuel has shot up over 30%, outperforming the eight most popularly traded precious and base metals including gold, silver, platinum, palladium, aluminum, copper, nickel and zinc. But according to one analyst, uranium could still increase nearly 100% further.
Uranium is now trading at a 26+-year high of $63.00/lb. and hasn't had a down month in five years. But this hasn't stopped Luke Burgess, managing editor of GoldWorld.com and contributor to EnergyAndCapital.com, from claiming, "The radioactive metal still has a lot of steam behind it."
When we last talked to him about a month ago, Burgess told us that he expected uranium prices to top $110/lb. in just four years. But in light of recent price developments, he now says, "If prices keep increasing like they have over the past 12 months, I expect uranium to top $125 a pound by 2010."
A near 100% increase in such a short time may sound a bit exaggerated. But Burgess argues that the logic behind this estimate is simple. He says, "Right now there are 28 [nuclear] reactors under construction around the world and another 62 being planned. Japan alone intends to add 11 more by the year 2010 and China hopes to add 24 to 30 by 2020. Uranium demand is destined to increase dramatically."
"And the big moves in uranium prices," Burgess says, "will not come until people actually realize the seriousness of the world's supply/demand conundrum."
"Production from the world's uranium mines now supplies only about 60% of the requirements of the world's nuclear power facilities, leaving a wide gap between supply and demand," he says. "The world's 440 reactors have a combined capacity of some 360,000 megawatts that require about 77,000 tons of uranium per year. Yet in 2005, mines supplied only about 41,000 tons of uranium."
Burgess boldly calls investing in uranium a "no-brainer." Now, unlike most other commodities, you can't buy uranium futures. However, you can invest in the companies that explore for and produce the stuff.
In his latest report, Burgess gives people interested in uranium investing some general advice and explains in more detail why he believes uranium will top $125/lb. by 2010.
You can access his report for free by clicking here: https://www.energyandcapital.com/subscribe/249