In recent years, the price of uranium has flown higher than that of gold, silver, platinum or palladium. From 2001 to 2006, the uranium price rose by approximately 700%.
It looks like the upside may have a lot further to go. Global demand for uranium is 160 million pounds per year, but only 90-100 million pounds is produced from mining production. The shortfall is being made up by drawing from stockpiles that had built up from the over-production during the 1970s and from decommissioned nukes from the former Soviet Union.
“For 20 years, mine supply has accounted for 60% of what is needed to supply reactors,” says Dr Tim Sugden, managing director at Nova Energy Limited at the gold and precious metals investment world conference in Hong Kong. Nova owns a major uranium deposit in Australia that it hopes to start mining in the near future. “After 2013, Russia has said it will stop supplying enriched uranium to the West.There will be a supply squeeze.”
Analysis: It is interesting and typical that people gain interest in an investment after it has gone up hundreds of percent. The fact that a supply squeeze is coming is of interest to us as we have fairly nice gains in our uraniums and will look to cash out as the public comes in at the top.