China’s Nuclear Ambitions Could Trigger Rise In Uranium Prices

China mines an estimated 1,200 tons of uranium each year, and is expected to produce at these levels in the near future. Since 1962, when China’s first eight uranium mines became operational, the country has established 26 major uranium mines. According to the China Nuclear Corporation (CNNC), China has located uranium deposits in more than 200 mining sites, over the past 50 years, and has an estimated 64,000 tons of uranium resources. Get For Information

Based on recent events, however, it seems China’s nuclear ambitions far exceed the country’s uranium resources. Although the nation reportedly consumes about 2,500 metric tons annually, sources such as Bloomberg have commented on China’s plans to purchase more than twice as much uranium this year, as part of its efforts to cut pollution and supply their economy with enough fuel to continue growing twice as fast as Europe and North America.

In the next decade, China plans to build three times as many nuclear power plants than the rest of the world combined, as the country’s enormous population, and increasingly modernized society, is calling for more electricity in a boom larger than the United States saw in the 1970s. While uranium prices have fluctuated between $42 and $46 per pound in the past couple of months, it’s likely that China will spend in excess of $420 million on uranium before the year is out.

With China buying such large and unprecedented volume, RBC Capital Markets expects uranium prices to jump as much as 32% in 2011, which would be the largest increase since 2006. From current uranium prices of about $46 a pound, uranium could see an average price of $55 a pound next year, and $60 in the next five years. Adam Schatzker, a metals analyst at RBC in Toronto, has suggested that such demand could also erode current supplies.

How much is too much? Financial Post has suggested China’s uranium demand could rise to 20,000 tons a year by 2020, or more than a third of the total uranium mined last year, on hopes to boost nuclear production to 85,000 megawatts – nearly 800% from the nation’s current nuclear capacity.

While it’s debatable that nations like the United States will follow China’s lead in stockpiling the commodity, uranium prices are still down more than 60%, compared to peak levels of $136 a pound seen in July 2007, and could be overdue for an adjustment.

August 26, 2016 · Posted in Blogs  


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