Japan, once Asia’s largest nuclear power producer, may restart one in every five reactors this year after safety reviews following the Fukushima disaster, driving uranium back into a bull market.
The nation may open 10 units, according to the median of 11 analyst estimates compiled by Bloomberg. Japan has been without atomic power since September, with its 50 reactors shut pending inspections by regulators. Uranium will average $41 a pound this year, or 14% more than now, a separate survey of five analysts showed.
Uranium slumped 51% since the earthquake and tsunami that led to the meltdown at Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant in March 2011. Stronger demand will boost profit for producers from Kazakhstan to Australia, some of whom canceled projects and closed mines as prices tumbled. Opening reactors will make Japan less dependent on imports of fossil fuels that contributed to a record current-account deficit.
“The Japan story is a major one still driving the uranium market,” said Jonathan Hinze, a senior vice president at Ux Consulting Co. in Roswell, Georgia, who forecasts 10 reactors to restart. “There are positive developments on the demand side, which should couple with slower supply increases, ultimately resulting in higher prices later this year.”
Prices fell 21% to $34.40 in 2013, the biggest drop since 2008, and averaged $38.45 last year, according to Ux, which provides research on the nuclear industry. They dropped to $34 in August, an eight-year low. The atomic fuel traded as high as $152 in 2007, according to the data starting in May of that year. Uranium closed at $35.90 yesterday.
Tokyo Electric, Japan’s biggest power utility, and Tohoku Electric Power Co. are among seven companies that applied for safety inspections on 16 reactors, according to the Nuclear Regulation Authority. The NRA has no fixed schedule to complete the checks, it said in November. Masaya Okuyama, a Tokyo-based spokesman for the regulator, declined to comment on when the inspections will be finished.
The forecasts in the Bloomberg survey ranged from six restarts to as many as 16. Tohoku Electric last month applied for checks on the No. 2 reactor at its Onagawa plant, according to a statement to the Tokyo Stock Exchange. Chugoku Electric Power Co. is seeking an assessment of the No. 2 unit at its Shimane site, according to a statement Dec. 25. Ten units will probably pass the NRA’s safety reviews, Sankei reported Jan. 20, citing unidentified people close to the regulator.
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