China uranium demand to double by 2020 but…….

Sometimes you wish you had a nice place to hide, especially after my previous blog in July suggested a uranium price recovery was coming. I didn’t say when but the underlying tone was that a recovery was on the way, the opposite has happened! The latest published spot price is $18.34/lb U3O8 (16-11-10). We need to go back 12 years to find a lower price and this is well down from $67 before Japan's Fukushima disaster in 2011.

Still, the latest news out of China is that Chinese demand for uranium is expected to nearly double to 9,800 tonnes per year by 2020 from the end of 2015. So said Wang Ying, chief executive of CNNC International, although she also added that a near-term supply glut will keep prices depressed.

China is in the middle of a nuclear reactor building programme and aims to have 58 gigawatts (GW) of capacity in full commercial operation by the end of 2020, up from 30.7 GW at the end of July. But Wang Ying told the recent IMARC mining conference in Melbourne, that only around 53 GW of capacity would likely be online by the turn of the decade as not enough construction of nuclear plants had already begun.

"I think perhaps we have a bottom of around $20 per pound at present. But unfortunately today because of excess supply and storage, I don't think it will be more than $40 by the end of this decade," she said on Monday.

Prices could recover as more nuclear capacity comes online by 2025, she added. Meanwhile, she said uranium needed to supply growing global nuclear generating capacity is seen at 80,383 tonnes in 2020, rising to 90,780 tonnes in 2025 and 106,301 tonnes in 2030. Estimated total production of uranium is seen at 75,000 tonnes by 2020 and around 85,000 in 2025. (Reporting by Melanie Burton; Editing by Joseph Radford)

Clearly, she has a vested interest in a low price and I have little doubt that the economics of supply and demand will push the price significantly higher. But………

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