Merrill Lynch Uranium Forecast
Merrill Lynch Research Analyst Anita Soni increased her 2007 spot forecast for uranium 42% from $53/lb to $75/lb. Amongst modest increases in Merrill Lynch's forecast for gold and silver, this 78% upwards increase in the uranium forecast definitely stands out. Because of Cigar Lake's aftermath, Soni said that "utilities are now scrambling to cover their commitments and thus demand is expected to remain tight for some time to come."
Soni cite various factors for her drastic revision, including a lack of new mega-projects moving to development, a future decrease in Russian uranium material exports, and growth in Far East nuclear reactor development. She did remark that potential supply could come from government-owned KazAtomprom in Kazakhstan and I have detailed before Kazakhstan's very ambitious plans to be one of the leaders in uranium production.
Australia continued its march towards uranium export. Several weeks ago, the Switkowski report on the future of nuclear energy in that country came out and was decidedly positive for nuclear power, paving the way for export to China, and possibly India and Japan.
Finally, the spot price of uranium hit $65/lb this week.