There is a saying that good things come to those that wait. The long-term fundamentals of the uranium industry remain strong on the demand side but the medium-term outlook remains in neutral, waiting for a kick start.
The near term signals are not yet strong enough to push the uranium price to a level that will stimulate new projects. Critically, until utilities reenter the market in significant volumes then any spot movements up or down are too early to signify a sustainable long-term trend.
Strategically nuclear remains a key part of global energy mix as evidenced by a recent UK-China civil engineer deal. China’s new build is real. However, offsetting pressure continues from growth in shale, tempered by reduced oil & gas prices, as the geopolitical balance of power plays out in the oil industry. There are a number of scenarios that could evolve but it serves as a reminder of the volatility and political nature of oil and gas.
“The long-term fundamentals of the uranium industry remain strong on the demand side but the medium-term outlook remains in neutral waiting for a kick start.”
- Derek Meates,
KPMG in Canada
The waiting game will likely continue for the medium-term but price momentum could snowball in such a short space of time with a coalescence of factors such as supply disruption, Japanese restarts or a worsening geopolitical position.