The 2011 Fukushima nuclear disaster sent shock waves not only
throughout Japan but also throughout the entire nuclear industry.
Many countries immediately cut back on their
with some even putting plans in place to eradicate it altogether.
The swift reaction sent uranium prices into a tailspin that they
have yet to recover from. But as 2013 progresses, new legislation
and momentum for the nuclear world may finally help uranium find
its bottom and give it room to run higher.
Uranium in 2011
The Fukushima disaster, sparked by a devastating earthquake and
subsequent tsunamis, occurred on March 11, 2011. It was the largest
nuclear disaster since the Chernobyl meltdown of 1986 and only the
second disaster to hit a level 7 on the International Nuclear Event
Scale. The result sent uranium stocks plummeting as much as 20% in
one day and kept the pressure on for more than two years.
Since the disaster, uranium prices are down more than 72% as demand
has dropped and outlook has soured. In fact, prices are hovering at
levels not seen since the end of 2005. Many investors have been
trying to time the bottom of the market to take advantage of the
upswing, but prices have continued to struggle, making those
efforts even more difficult. Now, Japan has begun to wade back into
the nuclear world with new safety rules and regulations that could
help uranium finally find its bottom.
Uranium Set to Stabilize
Japan recently introduced a new policy that it figures will make
the nuclear world more stable and allow it to still be a major
source of energy for the nation; it may also set a precedent in
safety that other nations can follow. The island nation "introduced
legally binding requirements for nuclear plant operators [to]
bolster their tsunami defenses, check for active earthquake faults
under their plants, set up emergency command centers and install
filters to reduce radioactive discharge from reactors,"
writes Josh Kerr
With these restrictions in place, Japan hopes to have as many as
six reactors operational by the end of the year and more as the
years go on. While the new reactors likely will not send uranium
prices soaring -- inventory levels are simply too high -- it will
help the commodity find a bottom to work from. The new safety
measures also have the potential to make uranium and the nuclear
world more stable for both the energy and investing world.
The road to recovery for this battered commodity will be a long
haul, but investors looking to get in on the ground floor certainly
have a compelling opportunity right now. Keep an eye on the
developments of nuclear plants especially in Japan and be ready to
execute when you feel prices hit your target level.
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Editor's note: This article by Jared Cummans was originally