At this very moment, we are sending out an important press release on the North Korea crisis and the booming demand for uranium ore. So I figured it would be a good idea to get it to you before it starts hitting the news wires. See below.
Best wishes,
Martin
FOR IMMEDIATE RELEASE: October 11, 2006
NORTH KOREAN NUCLEAR TESTING FANS FEARS OF
URANIUM’S ROLE IN NUCLEAR PROLIFERATION.
BUT DEMAND FOR URANIUM FUEL CONTINUES TO GROW.
Weiss Research’s Sean Brodrick Sees Chronic Supply Shortages
JUPITER, FL., October 11, 2006 — Despite fears of nuclear proliferation and the use of highly enriched uranium by rogue nations such as North Korea, the growing attractiveness of uranium as a fuel source is not diminishing, resulting in chronic shortages of uranium ore that could drive its price higher for at least five more years, predicts Sean Brodrick, a resource analyst for Weiss Research, Inc.
At Weiss Research’s MoneyandMarkets.com, Brodrick writes: “In the past four months, while the lights in the gold and oil markets temporarily darkened, uranium prices have been glowing — roaring ahead by nearly 26%. The gap between uranium supply and demand is so wide, even major geopolitical shifts are not making a dent in uranium’s long-term bull market.”
Brodrick cites several powerful factors behind this trend:
- The worldwide supply/demand gap for uranium will reach an estimated 42 million pounds in 2006.
- In terms of the volume used, uranium is thousands of times more efficient than fossil fuels. The energy in one uranium fuel pellet — the size of a fingertip — is the equivalent of 17,000 cubic feet of natural gas, 1,780 pounds of coal, or 149 gallons of oil.
- Uranium mine production can’t keep up with demand. Production from world uranium mines now supplies only 62% of the requirements of power utilities.
- The supply-demand squeeze could worsen significantly. By 2015 some estimates put uranium oxide demand at 264 million pounds per year — up from 171 million pounds today.
“In the wake of North Korea’s nuclear tests, countries like India may encounter some additional resistance when seeking to buy uranium from sources such as Australia,” comments Brodrick. “But they will not be deterred from their ambitious nuclear construction projects and they can acquire the needed uranium fuel by other means, continuing to help bid up the price of uranium on the world market.”
It is based on these factors and historical trends that Brodrick sees uranium prices continuing to rise until the end of the decade and beyond. “Expressed in today’s dollars, uranium reached a peak of $145 per pound in 1978,” he writes. “In contrast, it recently traded at only $53.25 per pound. So a rise to $70 per pound by the end of next year would not be surprising.”
In a just-released 47-page report, “The Golden Age of Uranium,” Brodrick shows why the uranium bull market is just beginning and recommends several alternative vehicles for investors, including a uranium mutual fund and several mid- and small-cap uranium miners.
For additional information on Sean Brodrick’s “The Golden Age of Uranium,” click here.
Sean Brodrick, a resident resource analyst at MoneyandMarkets.com, has more than 25 years experience as a professional journalist and financial analyst. He is also a contributing columnist to MarketWatch.com and a frequent commentator on one of Canada’s premiere financial websites, HoweStreet.com.
For more information and archived issues, visit http://www.moneyandmarkets.com
About MONEY AND MARKETS
MONEY AND MARKETS (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Sean Brodrick, Larry Edelson, Michael Larson, Nilus Mattive, and Tony Sagami. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM. Nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical inasmuch as we do not track the actual prices investors pay or receive. Regular contributors and staff include John Burke, Amber Dakar, Monica Lewman-Garcia, Wendy Montes de Oca, Kristen Adams, Jennifer Moran, Red Morgan, and Julie Trudeau.
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