Uranium Spot Prices Surge to New Records
2007-05-09By Keith Kohl
Baltimore, MD--Uranium has been white hot recently. But will yellowcake's future turn out just as profitable for us as the last few years have been? The easy answer--absolutely! The demand for uranium is going to skyrocket due to the soaring nuclear industry.
I know you've thought about it before: "Just how far can the uranium bull run before being corralled?"
The notion has entered my mind a few times too.
I mean, growing over 1,500% in seven years is phenomenal. But I've read more than a few of your concerns that $113 per pound was the end.
But on Monday, the weekly spot price for uranium surged again, this time reaching $120 per pound!
Yet that record-breaking price level is still trivial compared to where uranium will be in the future.
Last month, I pointed to the soaring growth of nuclear energy as driving demand. Let's face it, with over 158 nuclear reactors being built in the near future, producers can expect a huge demand for uranium.
Here's the thing: Uranium only constitutes roughly 5% of a nuclear plant's budget. So they can afford to pay a hefty price, even if prices are five times their current levels.
And uranium has an even brighter future.
Here's why . . .
The world is not producing enough uranium. Producers are supplying just 74% of the total global demand!
And trust me, the supply picture is going to get worse within the next decade.
Let's focus for a second on the place we are currently getting our uranium.
You see, ever since the 90s, the U.S. has been buying uranium from Russia through the U.S.-Russian Highly Enriched Uranium (HEU) Purchase Agreement.
Russia had to do something with the 30,000 nuclear weapons they developed during the Cold War, right?
The highly-enriched uranium extracted from their nuclear weapons can be blended into low-enriched uranium (LEU). The LEU can then be used at commercial nuclear power plants in the U.S.
How much uranium can this possibly provide?
Under the agreement, roughly 500 tons of HEU are to be blended down and sold. But the Russians can only blend about 30 tons per year. Furthermore, the deal will expire in 2013. If it isn't renewed (and many experts think it won't be), the U.S. will have to look elsewhere for uranium.
What does that mean for us?
As you know, the U.S. generates 20% of its electricity from nuclear energy. I've already pointed out how that is about to grow with the addition of new power plants.
Now take into account the fact that those plants receive half of their nuclear fuel from those Russian nukes.
Think about that for a minute.
In six years, our nuclear plants are going to be scrambling to find a new source of uranium. Also remember that it can take years for new uranium mines to begin production.
That's why I love the small uranium mining companies. With the right management and a solid list of properties, the opportunity is there to make a fortune. Click here for a chance to get in on some of these uranium plays.
Everyone has been waiting for a correction in the weekly spot price of uranium, currently at $120 a pound. And we probably will experience that correction before the end of 2007. But even with a correction, we're going to see uranium repeatedly break record prices in the future.
Baltimore, MD--Uranium has been white hot recently. But will yellowcake's future turn out just as profitable for us as the last few years have been? The easy answer--absolutely! The demand for uranium is going to skyrocket due to the soaring nuclear industry.
I know you've thought about it before: "Just how far can the uranium bull run before being corralled?"
The notion has entered my mind a few times too.
I mean, growing over 1,500% in seven years is phenomenal. But I've read more than a few of your concerns that $113 per pound was the end.
But on Monday, the weekly spot price for uranium surged again, this time reaching $120 per pound!
Yet that record-breaking price level is still trivial compared to where uranium will be in the future.
Last month, I pointed to the soaring growth of nuclear energy as driving demand. Let's face it, with over 158 nuclear reactors being built in the near future, producers can expect a huge demand for uranium.
Here's the thing: Uranium only constitutes roughly 5% of a nuclear plant's budget. So they can afford to pay a hefty price, even if prices are five times their current levels.
And uranium has an even brighter future.
Here's why . . .
The world is not producing enough uranium. Producers are supplying just 74% of the total global demand!
And trust me, the supply picture is going to get worse within the next decade.
Let's focus for a second on the place we are currently getting our uranium.
You see, ever since the 90s, the U.S. has been buying uranium from Russia through the U.S.-Russian Highly Enriched Uranium (HEU) Purchase Agreement.
Russia had to do something with the 30,000 nuclear weapons they developed during the Cold War, right?
The highly-enriched uranium extracted from their nuclear weapons can be blended into low-enriched uranium (LEU). The LEU can then be used at commercial nuclear power plants in the U.S.
How much uranium can this possibly provide?
Under the agreement, roughly 500 tons of HEU are to be blended down and sold. But the Russians can only blend about 30 tons per year. Furthermore, the deal will expire in 2013. If it isn't renewed (and many experts think it won't be), the U.S. will have to look elsewhere for uranium.
What does that mean for us?
As you know, the U.S. generates 20% of its electricity from nuclear energy. I've already pointed out how that is about to grow with the addition of new power plants.
Now take into account the fact that those plants receive half of their nuclear fuel from those Russian nukes.
Think about that for a minute.
In six years, our nuclear plants are going to be scrambling to find a new source of uranium. Also remember that it can take years for new uranium mines to begin production.
That's why I love the small uranium mining companies. With the right management and a solid list of properties, the opportunity is there to make a fortune. Click here for a chance to get in on some of these uranium plays.
Everyone has been waiting for a correction in the weekly spot price of uranium, currently at $120 a pound. And we probably will experience that correction before the end of 2007. But even with a correction, we're going to see uranium repeatedly break record prices in the future.
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