Canadian Uranium Producers to Benefit From Renewed Demand for Nuclear Power

The Globe and Mail reported that Canadian uranium producers are set to benefit as demand for nuclear energy bounces back post-Fukushima, powering uranium bonds.
As quoted in the market news:

Uranium One Inc., the world’s third-largest uranium producer, is the best performer this year in the Bank of America Merrill Lynch U.S. high-yield metals and mining index. The Toronto-headquartered firm, acquired in 2013 by Rosatom Corp., Russia’s state-owned nuclear firm, has returned 35 per cent to investors this year. Cameco Corp., the largest uranium producer in Canada and second-largest in the world, has $1.5-billion worth of bonds all trading around or above par.

The price of the commodity is poised to jump in the next six to 12 months as China aggressively ramps up construction of nuclear reactors and utilities around the world renegotiate contracts with uranium producers, said Rob Chang, a metals and mining research analyst at Cantor Fitzgerald LP.

“Everyone in the industry knows there’s not enough being produced to satisfy upcoming demand,” Mr. Chang said.

The anticipated rebound will be driven in part by a paucity of supply as countries idled their nuclear reactors and looked for alternative energy sources following the 2011 earthquake and tsunami that destroyed Japan’s Fukushima reactor, claiming more than 15,000 lives. Nearly five years later, no country has gone “cold turkey” on nuclear – even Japan has started up its reactors again, he said.

Click here to read the full Globe and Mail report.