Recently Mr. Matt Badiali wrote an article predicting that investors could make money next year trading in uranium producing company shares. Recent analyses have indicated that in 2018 there will be production of up to 20 million pounds of uranium which currently has no interested buyers, as you already probably guessed it the uranium price took a dive. This trend is not unique as it began way back in 2011 after it had hit one of the all-time highs in January at $72.50 per pound.
In March of 2011, came the earthquake and tsunami that ended up damaging the Fukushima Daiichi power plant. It was reported that the earthquake damaged one of the reactors and when the tsunami came, it flooded the whole area resulting to destroy backup generators. Minus the backup power, the much needed cooling water could not get into the power plant causing a meltdown, something all nuclear power plant operators and owners alike abhor and fear. This was when the world came to terms with how susceptible the nuclear power industry can be and what followed was the shutdown of all nuclear reactors in Germany resulting to a dip in the demand for uranium causing an almost total collapse of the uranium price.
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— Matt Badiali (@Matt_B_Guru) December 1, 2017
In response to these market shocks, major uranium producing companies have announced plans to cut production. For instance, Cameco Corporation announced that it would its production surplus to just 5 million pounds and what followed next shocked many. One of the world’s largest uranium producers, Kazakhstan’s state-owned Kazatomprom announced a reduction of production by at least 20% for the next 3 years. These actions led to a lot of excitement in the stock market with shares of companies like Uranium Participation Corporation that hold physical uranium for investment rising substantially in a long time. For instance, Uranium Participation Corporation’s shares shot up by at least 30% in less than six weeks. Shares of uranium producing companies have also followed suit and business analysts who specialize in the uranium sector are bullish that this is only the beginning with some estimating a rise in the price of uranium to more than double from its current price to add at least $30 more per pound of uranium.
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