Australian news, and some related international items

The Death Spiral Of Nuclear Energy And The Demise Of Uranium Miners

Seeking Alpha, Jul. 28, 2017   Includes: BBLBHPCCOEGRAFNXERIOURA Caiman Valores   Contrarian, long-term horizon, research analyst, value 


  •  Uranium is caught in a protracted slump that is sharply impacting uranium miners.
  • Despite claims that prices will rise sentiment towards nuclear power has turned unfavorable.
  • Demand growth for uranium remains muted which along with growing supplies will keep pressure on prices.
  • There is no indication of a sustainable recovery in sight making uranium miners value traps.

There has been a surge in interest in uranium explorers and miners in recent months because of growing optimism surrounding the outlook for the radioactive metal. This has sparked a rash of upgrades for a number of uranium miners and explorers including Cameco Corp……

The marked uptick in the outlook for uranium is long over due with the radioactive metal caught in prolonged slump that now sees it trading at less than a sixth of its 2007 high………

Despite the proclamations of some analysts and market pundits there are distinct signs that point to a sustained recovery in uranium being unlikely and that the long-term prognosis for the fuel is poor.

What is driving this positive outlook?  The progressively positive outlook for uranium mining stems from a belief that the current global supply glut which has been weighing heavily on uranium prices will be eliminated over the next two-years.

There is also the expectation among market pundits that as demand for the radioactive metal begins to grow global supplies will diminish. This is because the prolonged slump according to those pundits has led to a dearth in investment in exploration and mine development which will impact uranium production in coming months.

Furthermore, uranium miners have been forced to shutter high cost production because it was uneconomic at current prices. The slump in uranium particularly in the wake of the Fukushima disaster sent one of the world’s largest uranium miners Energy Resources of Australia (OTCPK:EGRAF) also known as ERA, which at its peak was supplying 10% of the world’s yellow cake, into terminal decline……(registered readers only)

July 29, 2017 - Posted by | General News

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