Nuclear crisis is unlikely to curb demandAPAN'S nuclear crisis is unlikely to curb demand fornuclear power and global uranium companies can still look forward to buoyantgrowth, new research finds.
"Growth in the sector is expected to remain buoyant,albeit on a flatter trajectory than previously thought, driven by strongfundamentals, including the global need for low carbon, base load electricitygenerating capacity,'' Capital Research (RCR) managing director John Wilsonsaid. RCR, an equity research company, today published its majorquarterly report that covers 17 global uranium companies. "It isevident that older reactors, certainly those over 30 years, will be underincreased scrutiny,'' Mr Wilsons aid of the wash up of the Japanese nuclearcrisis at Fukushima. "The key lesson from Japan's nuclear crisis maypoint to the need for, and benefit of, greater transparency and accountabilityof government and stricter oversight of government nuclear agencies.''
The report found that the global index of uranium equitieshad dropped 19 per cent in value in the past month, since Japan's earthquakeand tsunami damaged the Fukushima nuclear plant, However, strongfundamentals remained as major users China, India, Russia and the US allreaffirmed their commitment to nuclear energy. The uranium spot price isabout $US60 a pound ($A58.26) after falling to $US49/1b ($A47.58) in mid-March.This compares with the long-term contract price $US73/1b ($A70.88) atFebruary 28.
Mr Wilson said any Japanese impact on the uranium price was expected to be temporary.He said prices were expected toreturn to US$70/lb plus territory, the price necessary to supportdevelopment decisions at advanced projects. MrWilson said other factorsdriving nuclear growth included high oil, gas and coal prices, carbon pricing,growth in world energy demand and uncertainty around renewable energytechnologies. There port said that about 75 per cent of all nuclearreactors in operation worldwide are more than 20 years old, 25 per cent morethan 30 years old. Germany has temporarily shut down pre-1980commissionedreactors (seven out 17) after the Fukushima accident.