Supercycle in uranium

The sentiment for uranium has been hammered severely and no one wants to talk about investing in uranium at moment. You may remember, 2 years ago, following the Fukushimka earthquake and the following disastrous tsunami, the Japanese nuclear power plan experienced a deadly meltdown. A panic reaction occurred across the world: Japan shut down all 50 of its nuclear reactors; Germany shut down 8 of its 17 reactors and will phase out the rest by 2022; Switzerland decided on a slow phaseout starting in 2019 and extending through 2034. Even prior to this Fukushimka meltdown, Austria, Sweden, Italy and Belgium had plans to eliminate their nuclear facilities. As a result, the demand for uranium has plunged, which sent uranium prices from $70 to $40. The thing is, the world simply can not function without the nuclear power: there is just not enough power out there, period! Actually, according to the World Nuclear Association, there are 60 reactors being built around the world today. Another 150 or more are likely to come online during the next 10 years. Over 200 are further back in the pipeline.  In other words, the long term impact on the demand from those overreaction due to the Japanese reactor shutdowns is minimal, if any. On the contrary, the demand will only significantly go up. However, it is reported that the supply of uranium will be substantially reduced in the future since many mining companies have cut down their production. Just to think  about what will happen when a increasingly demanded resource is facing a declined supply. It is just a sweet spot for the investors. Now it is likely a great time to invest in uranium as no one wants to own it. That is the beginning of a suppercycle for a resource.

The perfect means to invest in this sector is to buy the stock of Cameco Co (CCJ), the biggest supplier in Canada. Actually Cameco mines are responsible for about 14% of global uranium production. It owns the world's second largest deposit of high-grade uranium. When people wake up and realize that there will be a shortage of supply for uranium, shares of CCJ will likely explode higher on such news. You want to own it before this happens.