JP Morgan not quite as optimistic about uranium near term
Since there appears to be enough uranium in the market to meet near-term utility requirements, J.P. Morgan is pushing its target date for a price spike in the commodity to 2016 from 2015.
As a result, its new spot price forecasts are US$43 per pound in 2013 (US$46 previously), US$58 in 2014 (from US$60), US$70 in 2015 (from US$90) and US$90 in 2016 (from US$70).
“Despite this push out, we have a favorable outlook for uranium over the long term due to relatively predictable demand and high inducement prices, which are limiting supply growth,” said Tyler Langton, a metals and mining analyst.
He noted Russia’s contract for highly enriched uranium with the U.S. expires this year and utilities are looking to secure supply, so prices should start to rise in the second half of 2013.
“We believe this will likely result in a significant price spike with new mine supply requiring time to catch up after two years of project deferrals,” Mr. Langton told clients.