Uranium prices have always been known as fickle at best, and volatile at worst. This year has proved to be the same. But to be frank, this is exactly the type of opportunity Australia could bank on to help its energy crisis.
Uranium closed at $27.35, down slightly since last Friday 21 September 2018. Pretty impressive considering analysts from Trading Economics only expected it to trade at US$21.30 by the end of this quarter. This is not to say that won’t happen, but there’s some perspective for you.
Uranium prices likely to continue rising
Despite the volatile nature of uranium prices, CEO and president of Westwater Resources Inc [ASDAQ:WWR], an energy materials development company, expects that the uranium market will continue to build and so too will its price.
According to Ux Consulting, since 2016 uranium spot market prices have climbed US$17 billion, so far in 2018. At the same time, spot market volumes have almost reached £57 million, the highest spot price since 1992.
We have seen reduced uranium production in companies such as Kazakhstan, Paladin and Cameco, who have put fewer pounds of uranium concentrate in the market. Meanwhile, the amount of nuclear generating facilities is on the rise, with 452 operational power plants and 55 nuclear plants currently under construction according to the World Nuclear Association.
The growth in the nuclear sector is set to increase demand by up to 13% for uranium concentrate as these plants begin operating.
This could put the Australian economy in a very favourable position, and that in turn, could mean you.
Australia exports 400 shipping containers of uranium every year, according to Sky News reporter Alan Jones. That’s enough to generate, satisfy, and reduce costs on all our own electricity needs, with no emissions.
But instead, we assist other countries to reap the benefits of this clean energy source.
Keep in mind, Australia has 40% of the world’s nuclear energy reserves, but no nuclear power plants. Meanwhile, the US economy generates around 30% of the world’s nuclear energy.
But Australia isn’t even looking at it as an option, despite an energy crisis that is currently gripping the nation.
We are the only G20 country without nuclear power. Here is what Mr Jones recently said:
‘We know we have a power crisis. That energy costs are crushing businesses, farmers and families. Yet we don’t talk about nuclear energy, guaranteed to power millions, lower bills, and next to no emissions. I know I’ll cop grief, because I’m talking nuclear.’
What uranium could mean for the future of Australia
Of course, uranium isn’t the sole solution. No amount of positives can guarantee that, if you don’t get your energy mix right.
What happens? Your economy no longer functions productively and without an increase to productivity there isn’t an increase in the stand of living.
But say we get it right, invest in some nuclear and use it to help power our cities and towns with cleaner energy.
Well, you could expect that energy bills will be reduced, that’s more cash in your pocket. Meaning, you can spend your hard earned money on something you actually want to. Plus, nuclear power takes the sting from other renewable energy sources that benefit and depend on an individual.
Nuclear could save you buying into thousands of dollars’ worth of solar or wind energy, which relies on external factors that can be quite unpredictable.
And while some people believe money isn’t everything, arguably not having to stress about the price of energy bills would increase any Aussies standard of living.
If you still aren’t comfortable with the sound of uranium and nuclear power, than you better get over that quickly — because there’s a new bull market emerging from this energy source.
For Money Morning
PS: Discover how you could take advantage of the next big resource rush. Today, Greg Canavan shares how you could capitalise on uranium’s next potentially colossal comeback. To find out more read his free report ‘The catalysts set to spark Uranium’s next Blockbuster Bounce-Back’ download now.