|
The Fundamentals Argue for Higher
Uranium Prices, Too
The Fundamentals Argue for
Higher Uranium Prices, Too …
There are 438 nuclear power reactors around the
world, according to the World Nuclear
Association. There are 32 more under construction, 74 on order or planned,
and 214 proposed.
Reactors typically require a first fill of around
600 metric tonnes of uranium and then consume around 200 tonnes per year.
In the U.S., where 103 operational nuclear power
plants provide 20% of the country's electricity, reactors that have met the end
of their normal 40-year operating license are being granted extensions, and the
U.S. Department of Energy is pushing incentives encouraging power corporations
to build new reactors in an attempt to stave off an energy shortage.
UX Consulting says existing nuclear power plants
used 173 million pounds of uranium in 2006, while supply from mines was 103
million pounds. This 70-million-pound gap was filled by sales from stockpiles.
|
Add in the 32 new plants this year and that's more
than a 7% increase in demand. Factor in those already on order or planned, and
that's a whopping 24% increase in demand!
But wait … the shortfall
gets even bigger once you take into account the projected decline in the amount
of uranium available from decommissioned nuclear weapons over the next 20 years.
About one-third of the uranium used in the U.S.
comes from old Russian nuclear warheads under the Megatons-to-Megawatts program.
The Russians have said they won't renew the agreement when the program expires
in 2012. Why? They need the fuel for their own plants and they're sick of
selling it cheap.
I haven't even mentioned the production delays,
either. Global uranium output from mines will probably come in at 112.1 million
pounds of yellowcake this year, down from earlier estimates of 117 million
pounds. That's five million pounds of production that's getting pushed back from
this year until next. And it's likely that we will see delays then, too.
|
|
While there's a lot of uranium in
this picture, we'll need a whole lot more to meet current demand!
|
|
So you see, supply simply
cannot keep up. In fact, as tight as the uranium supply/demand squeeze is now,
most analysts expect it to get much worse after 2010.
|
