Twelve years ago, a 9.0 magnitude earthquake struck off the coast of Japan…setting off a massive tsunami.
A three-story wave devastated the Fukushima Daiichi nuclear power plant causing the worst nuclear meltdown since Chernobyl.
The Fukushima disaster led to a global backlash against nuclear power.
Some countries closed existing plants after the meltdown… others stopped planning new ones.
Fast-forward today, and the picture looks extremely different…
Sentiment toward nuclear power has rapidly changed…
If the world desperately wants to reach its climate goals, we will need nuclear power.
That’s why countries like the US, UK, Belgium, France, Japan, China and many more have plans to:
#1: Build new nuclear reactors – According to International Energy Agency (IEA), 8GW of new nuclear capacity was brought online in 2022, but the Net Zero Scenario calls for over four-times as much annual deployment by 2030.
#2: Extend the services of existing plants – Lifetime extensions of existing nuclear power plants are one of the most cost-effective sources of low-emission electricity.
But you can’t have cheap nuclear power without uranium…
The Uranium price is up +40% in 2023 and marching higher…
Uranium prices plummeted after Fukushima. World governments wanted distance from nuclear power.
But today, the price of uranium is soaring.
In 2023, uranium is already up over 40%.
In fact, on 15 September 2023, the price of uranium reached a HUGE milestone!
It crossed $60 per pound and sits at $70 as I write this…
I expect it to keep climbing because…
Firstly, according to the World Nuclear Association, demand for uranium in nuclear reactors is expected to climb 28% by 2030… and to nearly double by 2040.
Yet supply is still scarce after a decade of low production.
You see, when uranium’s price was falling, miners couldn’t turn a profit by producing it. So they stopped digging it up. From 2016 to 2020, global uranium production dropped by a quarter.
In other words, today there’s a huge imbalance between uranium supply and demand.
Uranium prices need to rise to support investment to meet this demand.
That’s why, I don’t think it’s far-fetched to say we could see prices hit $100/lb – last seen in 2007 as the lack of supply worsens.
The nuclear supply squeeze will take a long time to unwind… And until it resolves, expect uranium to keep marching higher.
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