This Hated Commodity Could Make Huge Gains in 2018

The forecast showed an additional 20 million pounds of uranium production for 2018… with no buyers. As you can imagine, the uranium price plummeted.

It hit its lowest price in October 2016 at $18.75 per pound. That touched a 13-year low price.

The downtrend began back in 2011. The uranium price peaked at $72.50 per pound in January 2011. It fell steadily since then, down a total of 74%.

This is a shocking consequence for an energy source that many embraced as a “green” rescue from hydrocarbons just a few years ago. Nuclear strength creates safe, carbon-free energy.

The problem is, it can cause huge disasters. That’s what we discovered when the Fukushima disaster hit Japan.

The decline of Nuclear strength

An earthquake and tsunami damaged the Fukushima Daiichi nuclear strength plant in March 2011. The earthquake damaged a reactor. Then the tsunami overwhelmed the area, destroying vital backup generators.

Without the backup strength, cooling water couldn’t get into the plant. That caused a runaway reaction, a meltdown – the greatest fear for all nuclear strength plant operators.

A series of human errors compounded the damage. The operator, Tokyo Electric strength Company, was completely unprepared for the situation.

The consequence killed the nuclear strength industry.

Fukushima turned the world against nuclear strength. Germany shut down all its reactors in response. need for uranium fell, and the uranium price collapsed.

This finally led major uranium producer Cameco Corp. to cut production in early November 2017. The company’s earnings fell and fell. It struggled to continue profitability. It finally announced that it would suspend operations at its flagship McArthur River mine for 10 months.

Cameco’s decision cut the surplus to just 5 million pounds… and then the unthinkable happened: The world’s largest uranium producer followed suit. Kazakhstan’s state-owned uranium miner Kazatomprom cut production by 20% for the next three years.

The consequence could be a enormous bull market in uranium.

The Uranium Price and a Windfall for Uranium Producers

Shares of Uranium Participation Corp., which keep up physical uranium for investment, soared in response. Shares are up 30% in just a month and a half.

Shares of uranium companies surged too. However, this is just the beginning. Analysts that cover the uranium sector believe these cuts could add $30 per pound to the price of uranium. That’s more than double the current identify price.

For uranium producers, this will be a windfall. Companies like Cameco and Ur-Energy Inc. will see revenue and earnings rocket higher.

This appears to be great news for the uranium sector. It’s a story we’ll continue to watch in 2018.

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