In January I told you to forget about a continuing downtrend in uranium. And I was “certain that the trend from here is going nowhere but up.”
I argued that we’d see a surge in uranium use over the coming years – with demand driven by both developed and emerging economies alike, with the majority of growth coming from China.
And I specifically called out uranium mining giant, Cameco (CCJ), and a smaller miner, Denison (DNN), as the two companies to watch as the demand escalated.[ad#Google Adsense 336×280-IA]Well, I hope you listened.
The two companies are up 15% and 30%, respectively, since that time.
If you didn’t jump on board in January, don’t fret.
There’s plenty of growth ahead in the uranium sector – thanks to two main drivers…
Uranium Booster #1: An About-Face By Japan
On February 25, Japan announced that it would restart dormant nuclear plants that were shut down in the wake of the Fukushima disaster…
According to The New York Times, “The new Basic Energy Plan, which states that Japan will push to restart reactors that were closed after the disaster in 2011 at the Fukushima Daiichi Nuclear Power Plant, overturns a promise made by a previous government to phase out the country’s nuclear reactors. The plan also leaves open the possibility of building new plants as well as restarting existing ones.”
Of course, this wasn’t a surprise to us, either. In March 2013, I said that when it comes to nuclear programs, “the country has already come to terms with the fact that it has no other options.”
Now, Japan’s backtracking sent uranium prices – and, in turn, the stock prices of uranium companies – blasting higher. It also dispelled the notion that the world would somehow find a workaround and use other energy sources.
Japan’s about-face isn’t the only reason we should be piling into uranium stocks right now, though…
Uranium Booster #2: Germany’s Turn to Recant its Uranium Stance?
Thanks to the latest moves by Russia and the reaction from the West, it looks like the energy sector will be front and center on the global stage again.
You see, Russia is a major supplier of energy to Europe, especially with its gas pipelines that run through Ukraine. It’s something that simply can’t be ignored.
Indeed, sanctions on Russia – or even self-imposed embargos by the Russians – could materially change the picture for uranium and nuclear consumption
Germany could be uniquely affected by the crisis…
After Fukushima, the Germans came out and vehemently criticized nuclear energy. They even condemned nuclear completely, vowing to close all plants by 2022.
What the Germans didn’t say, however, was that they’d end their reliance on nuclear energy, as well.
Germany wasn’t counting on the potential for the disruption of oil and gas supplies from Russia. While Germany imports oil from all over the world, Russia is its biggest supplier.
It’s not just Germany that’s affected, of course.
Ultimately, by invading Ukraine, the Russians have managed to disrupt future energy policy on the entire European continent.
Bottom line: Contingency plans will have to be made in the event that Russia does, indeed, continue a policy of thumbing its nose to the West. That should bode very well for the future of nuclear energy in the region – despite the calls for reducing reliance on the fuel in the wake of Fukushima.
For visual proof that the next stage of the uranium boom is taking shape, just check out Uranium Participation Corp. (U.TO), a fund that solely tracks the price of uranium.
And “the chase” continues,
Source: Wall Street Daily