The forecast showed an additional 20 million pounds of uranium production for 2018 … without finding a buyer. As you can imagine, the price of uranium dropped.
In October 2016, it hit its lowest price of $ 18.75 per pound. It touched a 13-year low price.
The recession began in 2011. Uranium prices in January 2011 reached $ 72.50 per pound. Since then it has steadily dropped to 74%.
This is a shocking result for an energy source that many years ago regarded as a "green" rescue from hydrocarbons. Nuclear power creates safe, carbohydrate energy.
Problems can lead to major disasters. This is what we discovered when the Fukushima disaster hit Japan.
Disintegration of Nuclear Force
In March 2011, an earthquake and tsunami damaged the Fukushima Daiichi Nuclear Power Plant. The quake damaged a reactor. Then the tsunami flooded the area, destroying vital backup generators.
Refrigerant water cannot enter the plant without towing capacity. This runaway reaction caused the melting – the biggest fear for all nuclear power plant operators.
A number of human errors have increased the damage. The operator, Tokyo Electricity Company, was not fully prepared for the situation.
The result destroyed nuclear energy.
Fukushima has turned the world against nuclear power. Germany closed all reactors in response. Demand for uranium has dropped and uranium prices have dropped.
It finally forced major uranium producer Cameco Corp. to cut production in early November 2017. Company revenue fell. He struggled to maintain profitability. Finally, the flagship announced that it would suspend operations in the McArthur River mine for 10 months.
Cameco & # 39; The decision lowered the surplus to just £ 5 million … and then it became unbelievable: The world's largest uranium producer followed suit. Kazatomprom, a state-owned uranium mine in Kazakhstan, has reduced production by 20% over the next three years.
The result could be a massive bull market for uranium.
Uranium price and a failure for uranium producers
Shares of Uranus Corporation, which holds a physical uranium for investment, rose in response. In just one and a half months, shares are up to 30%.
Shares of uranium companies also increased. But this is only the beginning. Analysts from the uranium industry believe these cuts could add up to $ 30 per pound of uranium. This is more than double the current spot price.
For uranium producers, it will be wind. Companies like Cameco and Ur-Energy Inc will see higher profit margins and profits.
This seems like great news for the uranium sector. 2018 is a story we will continue to follow.