Uranium Demand About to Rise
"China’s demand is insatiable." Bloomberg on Monday reported, "China is buying unprecedented amounts of uranium, signaling that prices are poised to rebound after three years of declines." Bloomberg highlighted that Thomas Neff, a physicist and uranium-industry analyst at MIT in Cambridge, stated that China may purchase about 5,000 metric tonnes this year, more than twice as much as it consumes, building stockpiles for new reactors. China’s demand for uranium may rise to 20,000 tonnes a year by 2020, more than a third of the 50,572 tonnes mined globally last year, as it boosts output to 85 gigawatts, nine times its
current capacity, according to the World Nuclear Association. The Asian giant recently agreed to buy more than 10,000 tons over 10 years from Cameco. "China’s demand is insatiable," said Dave Dai, an analyst at the Daiwa Institute of Research in Hong Kong. "They will have to take almost whatever is available," he added. Also commenting Monday, Canada's biggest brokerage said it expects the uranium spot price to jump about 32% next year to an average US$55/lb as demand erodes supplies. Another brokerage out with comments Monday, highlighted that while "a number of mining analysts have stated that spot uranium prices could move up to US$60/lb of U3O8 in 2011. We expect that spot uranium prices could average US$92.23/lb of U3O8 in 2011."
Extract from Canaccord Morning Coffee