Business

This hated product could make huge profits in 2018

The forecast showed an extra uranium production of 20 million pounds for 2018 … with no buyers. As you can imagine, the price of uranium plummeted.

It reached its lowest price in October 2016 at $ 18.75 per pound. That hit a low price in 13 years.

The downtrend began in 2011. The price of uranium peaked at $ 72.50 per pound in January 2011. It has fallen steadily since then, a total of 74%.

This is a shocking result for an energy source that many adopted as a “green” hydrocarbon bailout just a few years ago. Nuclear power generates safe and carbon-free energy.

The problem is that it can cause major disasters. That’s what we discovered when the Fukushima disaster hit Japan.

The disappearance of nuclear energy

An earthquake and tsunami damaged the Fukushima Daiichi nuclear power plant in March 2011. The earthquake damaged a reactor. The tsunami then flooded the area, destroying vital backup generators.

Without the backup power, the cooling water would not be able to enter the plant. That triggered an uncontrolled reaction, a collapse, the biggest fear for all nuclear power plant operators.

A series of human errors compounded the damage. The operator, Tokyo Electric Power Company, was unprepared for the situation.

The result killed the nuclear power industry.

Fukushima turned the world against nuclear power. Germany shut down all of its reactors in response. The demand for uranium fell and the price of uranium collapsed.

This eventually prompted major uranium producer Cameco Corp. to cut production in early November 2017. The company’s profits fell and fell. He struggled to maintain profitability. It finally announced that it would suspend operations at its McArthur River flagship mine for 10 months.

Cameco’s decision reduced the surplus to just £ 5 million … and then the unthinkable happened: the world’s largest uranium producer did the same. Kazakhstan’s state uranium miner Kazatomprom cut production by 20% over the next three years.

The result could be a massive bull market in uranium.

The price of uranium and a windfall for uranium producers

Shares of Uranium Participation Corp., which has physical uranium for investment, soared in response. The shares were up 30% in just a month and a half.

Shares of uranium companies also rose. However, this is just the beginning. Analysts covering the uranium sector believe that these cuts could add $ 30 per pound to the price of uranium. That is more than double the current spot price.

For uranium producers, this will be a windfall. Companies like Cameco and Ur-Energy Inc. will see revenues and profits skyrocket.

This appears to be great news for the uranium sector. It is a story that we will continue to see in 2018.

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