Uranium market getting ever sourer
* Uranium spot price hits new 2-year low, miners’ shares sag
* Idled Japan reactors weigh as politics unclear
* Uranium price seen stagnant to lower over next months By Julie Gordon…
TORONTO, Oct 5 – Eighteen months after the Fukushima nuclear meltdown, the spot price for uranium hit a two-year low this week, putting the squeeze on the already depressed shares of uranium miners.
With a looming election keeping Japan from making a decision on how much, if any, of its nuclear reactor fleet it will keep, and slowing growth inChina weighing on the broader resource sector, it will likely be months before uranium prices start moving back toward pre-Fukushima levels.
“In the near term, the price of uranium is going to go sideways to down,” said Raymond Goldie, a senior mining analyst at Salman Partners in Toronto, adding that the spot price is not likely to start recovering until March or April 2013.
That is bad news for producers Cameco Corp, Uranium One Inc and Paladin Energy Inc, which have watched their shares plummet since a massive earthquake and tsunami struck Japan in March 2011, crippling the Fukushima-Daiichi atomic power plant.
Cameco, the world’s largest publicly listed uranium producer, has lost more than 48 percent of its market value in the aftermath of the worst nuclear disaster since Chernobyl. Uranium One is down 62 percent, while Paladin has fallen 72 percent.
The uranium spot price hit a new two-year low this week at $45.75. That compares with the February 2011 average spot price of $69.63.
Weighing on the commodity are the dozens of Japanese reactors idled since the Fukushima disaster. Just two of the nation’s 50 working units are currently up and running.
While Japan’s economics minister said Friday that reactors can be restarted if the new nuclear watchdog deems them safe, the procedure for doing so is unclear, especially as the new regulator says its responsibility is safety, not restarts.
Adding to the uncertainty, Japan’s cabinet announced a new energy policy last month that aimed to end reliance on nuclear power by the 2030s…With a general election due within months, a major decision on the nation’s nuclear future appears unlikely in the near term, and worries are mounting over how utilities will deal with excess uranium inventories……
With costs soaring across the mining industry, new uranium projects, which analysts believe are needed to meet future demand, are being stalled or shelved indefinitely as the sagging commodity price makes building mines uneconomic.
BHP Billiton has delayed an expansion at its Olympic Dam mine in Australia, while Cameco recently shelved its Kintyre project, also in Australia, noting that development would require a uranium price of $67 to break even.
Cameco has also taken a more cautious tone on its plans to double uranium production to 40 million pounds a year by 2018, noting that growth will not come regardless of cost….
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