ASIA INTEREST GROWING
Japan last month confirmed plans to make nuclear power 20-22 percent of its total power mix by 2030, up from 2 pct in 2016, while China is set to boost nuclear power capacity by more than 60 percent to 58 gigawatt (GW) by the end of this decade. It sees that at around 150 GW by 2030.
China’s nuclear reactors are already gaining global market share. China General Nuclear Corp (CGN) and France’s EDF are building a Hualong reactor in England, while China also has a deal to build a third large reactor in Pakistan.
“Going forward, Chinese-made reactor technology will be exported and that will accelerate growth in emerging markets,” Keller said.
Perth-based broker Argonaut also sees a recovery for the downtrodden sector.
“We believe the uranium price is within two years of a sustained recovery,” it said in a recent report.
Risks, however, include construction delays in China’s next generation plants, due to both protracted safety testing and difficulty in gaining funding given a current domestic power oversupply. China’s nuclear build-out is well behind schedule, noted Argonaut Hong Kong-based analyst Helen Lau.
Australia, the world’s third largest producer, expects uranium prices to start rising slowly after recent production cuts.
However, it sees spot prices rising only around $6 a pound from current levels to $28 by 2020, at which level “uranium will remain a loss-making commodity for most producers”, the Department of Industry said in its latest quarterly minerals report.
Further out, however, it said new capacity under construction and the shake-out in supply should lead to “much greater upward price pressure over the longer term”.
Reporting by Melanie Burton; editing by Richard Pullin