Shinzo Abe Is Coming

While the Fly is busy over on his blog heralding the great Japanese revival, and the massive stimulus efforts the new/old government is bringing to the table, I am welcoming them for a different reason.

Their new prime minister Shinzo Abe is a nuclear man at heart, and he has commanded in no uncertain terms, “restart these fucking reactors, right now.” Abe will not stand for the masterful achievement of his party, the conversion of Japan to nuclear energy over the last 50 years, to be left by the wayside. Particularly if he hopes to stand up to the Chinese, he needs those reactors, or else Japan will be slapped around by a torrent of fuel supply issues and Chinese mainland fuckery.

If the uranium markets can just clear out some of the U308 glut, we can get some price stability. Brokerage in these kinds of zero volume markets are frustrating, as now the long term price of $60 that had held up so well appears to be breaking. If that happens, I have no reservations about saying CCJ will re-re-test the lows.

That would be about the most aggravating thing imaginable.

But outside of these petty price battles, the fundamentals for uranium and the miners are clearly shoring up. Even without a dramatic rebound from Japan nuclear demand, it is only a matter of time before existing market supply is swamped out.

Read here:

This past year may have been a sour one for uranium spot prices, but 2012 brought many positive developments for market fundamentals — especially in the second half of the year. Industry analysts see these developments as early signs of a crucial turnaround for uranium spot prices and uranium mining shares.

The uranium market has been on a long and bumpy ride to recovery since the 2008 financial crash crippled the commodities sector. Throughout the second half of 2010, investors cheered as the U3O8 spot price surged more than $30/lb, eventually hitting a pre-crash high of $72/lb in January 2011. However, the industry fallout following the Fukushima Daiichi nuclear disaster in March of that year wiped out most of the rally’s gains and spot prices remained range-bound, between $49/lb and $52/lb, for nearly a year.

In 2012, uncertainty was the dominant factor affecting spot prices. Previously nuclear-reliant nations like Japan and Germany signaled that they might be winding down their nuclear programs, while the potential that offloaded supply could flood the market made many buyers hesitant to buy at $50/lb, driving short-term spot prices down to $40/lb early in the last quarter.

The most significant development in 2012 came last month, with the pro-nuclear Liberal Democratic Party’s landslide victory in Japan’s federal election. That indicates that there will likely be a faster-paced restart program for the nation’s 48 inactive reactors.