Long term uranium market fundamentals remain strong, despite worries over what Japan will do with 53 of its 54 nuclear reactors, which are currently shut down for maintenance or safety reviews, says Australian research group, Resource Capital Research (RCR).
The firm, which released its Uranium sector quarterly review report on Friday, says that the mid-term outlook for the industry is still strong and that the emergence of robust strategic investor support and acquisition activity in the uranium market proves that point.
RCR MD John Wilson said that since the Fukushima incident over a year ago, the impact on the uranium sector has now been factored in, adding that the market was expected to be broadly balanced for the next 12 to 18 months.
In fact, RCR predicts growth in nuclear reactors in several countries, particularly China and India.
“There are currently 491 nuclear energy reactors planned or proposed globally, 9 more than prior to Fukushima,” said Wilson.
Additionally, he said, there are about 80 nuclear reactors expected to be commissioned globally by 2017, with 61 currently under construction and a further 491 planned or proposed.
“The key lesson from Japan’s nuclear crisis points to the need for, and benefit of, greater transparency and accountability of democratic governments and their institutions, and stricter oversight of government agencies in general; in this case nuclear agencies specifically,” added Wilson.
According to International Business Times, analysts in Australia wonder if a prolonged delay in Japan restarting its nuclear reactors could impact BHP Billion’s plans to substantially expand its uranium output at Olympic Dam mine, the world’s the largest uranium deposit.
Others, says IB Times, believe the continuing strength in China’s housing sector implies demand for uranium will continue to be strong, a point the Australia’s Federal Government’s key resources forecaster agrees with.
Uranium equities have staged a recovery over the past six months. A broad sector index, the Merrill Lynch Uranium Equity Index, was up 37%, having bottomed at 202 on October 4, 2011.
