What will next shoot the uranium price upwards ?
I am going to say the demand side - many more reactors being planned.
This week the EU pretty much endorsed more carbon restrictions, AND pretty much indicate they will go along with the French and British view that nuclear power will count as a non-carbon source in the complex calculations of how much carbon each nation needs to reduce. Many, many details to be sorted out.
This will have several results -
Since shutting down a nuclear plant would result in more need for carbon offsets, and thus higher cost for each nation's industry, likely impacting jobs, there will be strong political pressure to keep every nuclear plant open and running.
This is effectively a green light for EU nations to build more nuclear plants, including Germany. Yes, this sounds obvious, but the certainty that the EU will go heavily nuclear has gone from maybe 80 percent to maybe 95 percent, assuming no new Chernobyl accident.
One study at the world nuclear association site show that if carbon credits are included, the price of electricty from reactors can be a about 10% higher. The price ceiling for uranium could also be about 40% higher. The study is about 3-4 years old, and all the numbers would need to be re-run.
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The next big push on uranium prices will occur when someone does a count on how many plants are planned as of say mid April.
I expect the total numbers will be larger.
With more short term impact on pricing, I expect will we see a number of plans trying to 'fast track' a reactor or two in each country. Why fast track ? The carbon credit cost again, and also Vladimir Putin's move to restrict natural gas to the ukraine for a few days is a threst pushing Europe away from fuel imported from Russian controlled areas.
By the way economic growth in 'Eastern' Europe is high, with Estonia, Latvia and Slovakia at 11%, Poland, Checzk Republic, Romania, around 6-8% range, and even Hungary at 4%.
This growth is almost at a China like pace, and will require more electricity.
I don't expect these European growth rates were part of anyone's demand model. |
