Uranium plunged by US$6 a pound (or 13.6{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}) over the past week to US$38. Last week it was breaking highs with 44$, up over 25{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} from last year, but were unable to keep the new levels.. With 2 Fukushima reactors set to restart in 2015, the uranium sector has seen renewed interest in recent months. The spot uranium market is relatively small, so massive price jumps are normal. Today is to be noted though – this second largest week to week drop since ’96.
“Recent positive uranium spot price movements have failed to reverse the negative trend in the equities and, in the near term, equities will respond to macro news, such as in Japan where 19 of 26 assembly members recently voted in favor of nuclear reactor restarts.” Colin Healy, The Gold Report
Analysts predict that this may be the beginning of a long upward streak for the price of the commodity, however this may be sentiment driven. Most Uranium equities though have been affected with the TSX down more then 20{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} since August.
“We have heard from several sources that the recent price rally has been driven more by transient supply tightness and that over the medium term, the market remains well supplied,” Greg Barnes, Financial Post
With China committing to capping its carbon emissions by 2030, it plans for 20{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} to be covered by renewable sources. The numbers that don’t seem real? 1,000 nuclear reactors, 500,000 wind turbines or 50,000 solar farms are required to cover this. Currently China has 23 reactors with 26 more being built – this shows that China still has much to do to met this commitment.