Skip to main content

This Hated Commodity Could Make Huge Gains in 2018

The forecast showed an extra 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 result for an energy source that many embraced as a "green" rescue from hydrocarbons just a few years ago. Nuclear power creates safe, carbon-free energy.

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

The Demise of Nuclear Power

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

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

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

The result killed the nuclear power industry.

Fukushima turned the world against nuclear power. Germany shut down all its reactors in response. Demand 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 maintain 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 result could be a massive bull market in uranium.

The Uranium Price and a Windfall for Uranium Producers

Shares of Uranium Participation Corp., which hold 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 spot 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.




Source by Matt Badiali

Popular posts from this blog

Commoditizing the world

Let's discuss commodities; With the latest Enron situation, it is important to understand the way things work. A commodity is anything useful, especially a transportable agricultural product or mining product. This comes from the Latin word "commoditas" meaning roughly advantage, convenience. So then what is a commodity? Well we consider Gold, Silver, wheat, corn, pork bellies, coffee, etc all commodities. If you look in the back of the WSJ or Investors Business Daily you will see a listing of all the commodities traded on the commodities exchange. Enron made some errors no doubt, but let's not judge all commodity markets in haste. Commodity trading works best when there is a stable instrument of trade. Sometimes the instrument of trade is actually the commodity. If you looked most countries of the world today you would find that there are three basic instruments of trade; money, as in currency, precious metals and gems, drugs; like cocaine, opium, and

Virtual Currency Games

Every little boy's (and many grown men's) dream of making a living by playing video games is edging closer to reality. The recent release of HunterCoin and the in-development VoidSpace, games which reward players in digital currency rather than virtual princesses or gold stars point towards a future where one's ranking on a scoreboard could be rewarded in dollars, and sterling, euros and yen. The story of the millionaire (virtual) real estate agent... Digital currencies have been slowly gaining in maturity both in terms of their functionality and the financial infrastructure that enables them to be used as a credible alternative to non-virtual fiat currency. Though Bitcoin, the 1st and most well known of the crypto-currencies was created in 2009 there have been forms of virtual currencies used in video games for more than 15 years. 1997's Ultima Online was the first notable attempt to incorporate a large scale virtual economy in a game. Players could collect gold coins

Could This Be a Great & Extreme Reversal?

The EURGBP has been on of the best currency pairs to trade since the referendum. And it looks ready to kick off again... False Break Reversal The FBR is one of the great reversal patterns. They show up time and again but can catch us out because we've been conditioned to stay with the dominant trend. It started last Friday with the Harami, inside day. Monday broke lower following through, so it seemed, with the down trend running since July. By the end of the day, it had reversed, leaving behind a long wick that turned the day's trading into a Hammer, one of the best price action reversal candles. Tuesdays price action confirmed the FBR. The rule is that when price comes back above the high of the downside breakout candle, the FBR is set. Earlier sell trades closed and then reversed. That's exactly what we have done. Hikkake An added technical reversal is the Hikkake. It's formed by at least three candles, starting with the Harami. Following the break lower, recovery on