RBC takes an axe to uranium price outlook, sees continued surplus


RBC cuts its outlook for uranium prices over the next several years as it concludes the market will remain in surplus through 2020.

RBC believes Japanese reactor restarts could result in a recovery in uranium prices to $40/lb. in late 2014 or early 2015, but thinks the price is likely to be capped at that level until the market begins to tighten; the firm predicts only four Japanese reactors will restart this year with 28 - slightly more than half the current fleet - eventually restarting.

Spot prices recently dropped below $30 as supply remains well ahead of demand since the Fukushima disaster.

RBC cuts its price target for industry leader Cameco (CCJ -2.5%), seeing shares rangebound between $18-$27.

URZ -3.3%, UUUU -2.5%, URRE -1.5%, UEC -1.1%, USU -0.9%, DNN flat, URG flat.

ETFs: URA, NLR, NUCL.

From other sites
Comments (16)
  • fzer
    , contributor
    Comments (2) | Send Message
     
    In other words, buy. The court case shall pass as well.
    5 Jun 2014, 11:03 AM Reply Like
  • JohnNewman13
    , contributor
    Comments (77) | Send Message
     
    How does RBC forecast uranium prices 6 YEARS out. Ridiculous.

     

    The weatherman can't predict a 7 DAY forecast.
    5 Jun 2014, 11:06 AM Reply Like
  • Pony01
    , contributor
    Comments (320) | Send Message
     
    But the global warming cacophony goes out hundreds of years! RBC's forecast is ridiculous - did they even look at China with 68 new reactors under construction? I'm beginning to become pessimistic about all long term predictions. I'm a counter-cyclical investor: I'm buying uranium miners and holding my gold miners. RBC says let them eat cake...I will.
    5 Jun 2014, 11:30 AM Reply Like
  • usellibuy
    , contributor
    Comments (7) | Send Message
     
    Usually those analyst give a pessimistic outlook to drive price further down to give themselves a benefit to buy at lower prices at your COST. Some just cannot hold at paper loss. So investors beware.
    5 Jun 2014, 02:37 PM Reply Like
  • maple68
    , contributor
    Comments (16) | Send Message
     
    With new EPA legislation, China cutting on pollution and Japan struggling with their energy supplies costs there is no chance for uranium prices to go further down. RBC just wants to buy low.
    5 Jun 2014, 11:39 AM Reply Like
  • Cochise54
    , contributor
    Comments (425) | Send Message
     
    Not mention Germanys wake-up call from Russia?
    5 Jun 2014, 01:06 PM Reply Like
  • TechVet
    , contributor
    Comments (104) | Send Message
     
    Since 2007 there have been license requests for 24 new reactors in the US Four are scheduled to come online in 2020.
    http://bit.ly/1nTYrCz
    5 Jun 2014, 08:28 PM Reply Like
  • john001
    , contributor
    Comments (1173) | Send Message
     
    Just like it takes a hanging to focus the mind, hopefully another cold winter will help focus the minds of the idiot environmentalists (including Obama and the EPA) that nuclear energy is OK and needed.
    5 Jun 2014, 02:11 PM Reply Like
  • vireoman
    , contributor
    Comments (1203) | Send Message
     
    I'm an environmentalist and I support nuclear energy. And Obama is anything but an environmentalist. However, he is sensible enough to be very concerned about climate change and sensible enough to see the overwhelming advantage of weaning the country off of heavily-polluting coal and onto cleaner natural gas (and cleaner yet renewable sources of power).
    5 Jun 2014, 09:12 PM Reply Like
  • brokerjmac
    , contributor
    Comments (6) | Send Message
     
    Uranium prices could drop back to single digits where they were from 2002 to 2006. With the tax liability, declining Uranium prices, and declining demand - I'm out ! Next quarter will pale in comparison since the sale of Bruce Power boosted last qtr earnings. Wait for a better entry point.
    5 Jun 2014, 02:36 PM Reply Like
  • john001
    , contributor
    Comments (1173) | Send Message
     
    broker....I agree that prices could drop further, but doubt they will fall to single digits.
    I would like to know what the all-in break even costs of production is for a low-cost producer like cameco. They stand to benefit if further, substantial price drops force the higher cost producers to shut operations.
    5 Jun 2014, 02:52 PM Reply Like
  • jbrown1431
    , contributor
    Comments (8) | Send Message
     
    So, who is RBC...& where do they get their supposed credentials? Aren't they a bit out-of-touch with the real world? & What "surplus" are they talking about?
    5 Jun 2014, 06:39 PM Reply Like
  • DanielHolzman
    , contributor
    Comments (785) | Send Message
     
    I believe RBC is the Royal Bank of Canada. They might just know something about a large Canadian mining company.
    5 Jun 2014, 06:49 PM Reply Like
  • Caadian Nomad
    , contributor
    Comments (7) | Send Message
     
    you have to remember these guys don't look further than 18 months. In that time frame they are absolutely correct. In the meantime, I'm happy to collect a 1.8% diviidend and wait for the "experts" to change their minds (if they have one), at which point I will be happy to sell them my
    shares.
    5 Jun 2014, 06:54 PM Reply Like
  • labradoodle
    , contributor
    Comments (641) | Send Message
     
    The big institutionally owned corps. save their buyouts for the bottom of a cycle to get the best price. When these well capitalized companies start buying so should you. There's a lot to choose from right now.
    6 Jun 2014, 10:36 AM Reply Like
  • DDCorkum
    , contributor
    Comments (4) | Send Message
     
    I can believe the conclusions, but not the premises.

     

    Will Cameco be range-bound while uranium stays depressed? Sure. That's quite possible.

     

    But should RBC make this conclusion without any mention of countries other than Japan? That seems silly.
    9 Jun 2014, 09:35 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs