Nukes Making a Stir

Focus: MARKETS

For quite a while the nuclear industry has been lying low but there are stirrings once again as nations look to improve the efficiency and capacity of power generation notes Cecil Musgrave of InvestorsGuru.com in The Energy Report.

If a person consumed only nuclear-generated power, the amount of waste generated over his or her lifetime could be contained in a soda can. Compare this to the trainloads of coal delivered daily to coal-fired power plants and nuclear power seems like a no-brainer. Cecil Musgrave of InvestorsGuru.com sees nuclear power as a bridge to a renewable energy mix-but only if supply is reliable.

In this interview with The Energy Report, Musgrave explains why supply shortages may create a price spike for the commodity and names some uranium juniors that are poised to deliver the goods.

The Energy Report: Let's talk about the state of the international market for uranium. Profit margins for producers are still slim. Do you see a possibility that prices will rise this year?

Cecil Musgrave: Uranium prices sold off sharply after the Fukushima Daiichi nuclear power plant accident in March 2011, and have steadily drifted lower since then, from around $70 per pound ($70/lb) to its current price of around $43/lb. My charts say that uranium may have put in its bottom last November before bouncing over 10% on the back of Japan's election in December.

Since Fukushima, market sentiment for anything nuclear power related, like uranium, has been risk-off. While time was needed to stress test nuclear plants worldwide, the market's main concern was how the media, the public and governments around the world would react.