Uranium

India and France signed crucial nuclear cooperation agreements during French president Nicolas Sarkozy’s visit to India, which has triggered the uranium prices up in the global market.Till now, China’s increasing appetite used to spur uranium prices in the global market with Beijing planning to set up more and more nuclear power plants. However, with France inking crucial pacts with India in nuclear energy sector, uranium prices are set to shoot up further.

Expectations of demand from India and Chinese nuclear reactors have also pushed uranium spot prices to recent highs and threatens to cause a supply deficit. China’s need for nuclear fuel to serve its growing energy requirements had heightened the potential for supply problems in the uranium industry.The Chinese bumped long-term forecasts for their nuclear build-out and although there is actually no physical demand it has totally changed the psychology. There has been a major movement in the spot price since September.The spot prices have gone up to above $60 a pound, which is certainly at least a 50 per cent rise in the last four months.When the weapons processing program finishes in 2013 there is just generally a shortage of uranium going forward.In the post-Cold War era, secondary sources of the metal, such as from decommissioning Russian nuclear weapons, became a significant supply for the energy industry.Just a few days ago, uranium futures touched $61 a pound, up from $40 last June. Uranium futures have surged almost 20% in the past month. The uptick in pricing is a direct result of several factors, the most obvious being China’s 12th Five-Year Plan (2011-2015), which gave nuclear energy development top priority.According to a report, the country currently has 11 nuclear reactors in operation with a generating capacity of 9.1 gigawatts (gW). In 2005, the plan was to increase nuclear power to 40 gW by 2020. The new plan doubles that goal for nuclear energy to 70 to 80 gW by 2020.The country has contracts with France’s Areva for 52 million pounds; with Canada’s Cameco for 48 million pounds, and with Kazakhstan’s state-owned nuclear power company for 63 million pounds by 2020.