Building Boom on the Horizon
Spot uranium prices have doubled over the past year, as Chinese buyers continue to stockpile product to fuel 25 plants (over 20 GW) now in construction, and part of 60 worldwide in-process projects. With significant additional plans in place, both in China and many other markets (India, Middle East, Japan), uranium demand will double over the next decade. The cost of power is almost insensitive to the price of uranium – capital recovery is, by far, the most important cost – but will be noticeable on the income statement of any nuclear powered operator who is buying in the spot market, or rolling contracts during 2011. By the there is also some (unconfirmed) evidence that ‘system trips’ have increased sharply in 2010, a sign that an aging nuclear power infrastructure is due for higher maintenance or, worse, decommissioning or accidents?