Australian (ASX) Stock Market Forum

Uranium Shares have topped out

Jump to new
Uranium, from what i read, is not the future but the past. The future is Thorium, but how far away is this?

Why are we not building reactors to handle this? Can they be converted?

Less waste, more effeicient, peaceful (no weapons grade material as a BP)

:2twocents
 
CanOz said:
Uranium, from what i read, is not the future but the past. The future is Thorium, but how far away is this?

Why are we not building reactors to handle this? Can they be converted?

Less waste, more effeicient, peaceful (no weapons grade material as a BP)

:2twocents
Click to expand...

I'm pretty sure I read somewhere Thorium isnt as strong as uranium. It cant generate as much electricity.
 
professor_frink said:
To say that nuclear is clean because it doesn't produce greenhouse gasses is simplifying the matter to the extreme. Is coal a better energy source because it doesn't produce any radioactive waste? Do you see what I'm getting at here?
Click to expand...

The greenhouse layer effect is a major problem. If they fix that via nuclear energy..they can then look at how to get rid of the waste. The greenhouse layer effect is more of a problem than the waste IMO. They can just put it deep under the ground in some desert. :)
 
gone 100% cash. will be getting good uranium bargins in a few weeks. Uranium stocks as well as other stocks will go in the same direction as the ASX
 
chris1983 said:
The greenhouse layer effect is a major problem. If they fix that via nuclear energy..they can then look at how to get rid of the waste. The greenhouse layer effect is more of a problem than the waste IMO. They can just put it deep under the ground in some desert. :)
Click to expand...
Reminds me of a cat in the hat story...

http://www.amazon.ca/Cat-Hat-Comes-Back/dp/0394800028

"From Amazon.com
That behatted and bow-tied cat from Dr. Seuss's The Cat in the Hat is back, and, not surprisingly, is up to all sorts of mischief. This time, Sally and her brother are stuck shoveling snow: "This was no time for play./ This was no time for fun./ This was no time for games./ There was work to be done." But--you guessed it--the laughing Hat Cat has other ideas, as he lets himself in to eat cake in their tub. He leaves behind "a big long pink cat ring," which he then handily cleans with "MOTHER'S WHITE DRESS!" The dress then loses its pink stain to the wall, then Dad's shoes, then the rug in the hall, until finally the Cat must call in some assistance: from inside his hat comes Little Cat A, then Littler Cats B, C, D, E, and so on, nested like dolls in ever tinier hats. With this pack of felines, Sally and her brother may get rid of those stains, but they'll likely never be rid of that rascally cat. As should be expected from the good doctor, The Cat in the Hat Comes Back provides an excellent reader (and alphabet primer) for those just learning, not to mention ample laughs for everyone else. (Ages 4 to 8) --Paul Hughes"

Someone needs to go back to school! Yes he duz! Awww, who's a cuddly wuddly little cwissy wissy? *pats your head*

Along with another simple market force alongside supply and demand, is cost of production. A lot of nuclear reactors in the US wouldn't be able to make a profit if it weren't for the attractive (and highly questionable deals) they have done with the state bodies.

http://en.wikipedia.org/wiki/Trojan_Nuclear_Power_Plant

"Nevertheless, PGE continued to charge its ratepayers for the full cost of the plant, including decommissioning and waste disposal, and the same profit it would have earned if the plant had remained operating. The Oregon Public Utility Commission (OPUC) also allowed PGE to charge ratepayers for the new projects built to replace the plant, along with profits on the new plants.

In 1978, Oregon voters had adopted by a vote of 69% to 21% a ballot measure to prohibit utilities from charging ratepayers any cost of plants not currently providing utility service to customers. Lloyd Marbet and other activists worked on this measure.

In 1995, the OPUC allowed PGE to continue to charge ratepayers both for return of the investment over the original expected 35-year life of Trojan and to charge ratepayers to receive a profit on Trojan of over 13% before taxes, for a total of $251 million of Trojan investment and $304 million for profit over the next 17 years. This is in addition to another $300 million in Trojan decommissioning costs over the next 17 years."

And tell me, if nuclear power plants are battling to be competitive, who the hell is going to commit billions of dollars to a project that wont come to fruition for 10-20 years? Especially if running costs are likely to be higher then, and if we go through a worldwide economic downturn. Who the hell would put down that sort of money for a marginal investment in a time of slow economic growth?
 
chops_a_must said:
And tell me, if nuclear power plants are battling to be competitive, who the hell is going to commit billions of dollars to a project that wont come to fruition for 10-20 years? Especially if running costs are likely to be higher then, and if we go through a worldwide economic downturn. Who the hell would put down that sort of money for a marginal investment in a time of slow economic growth?
Click to expand...
I have to agree with you... to an extent... Once upon a time way long ago... back in the times of sherlock holmes, it was cheaper to have a house that was lit by gas than electricity... Eventually this technology was filtered down and heaps of devastating accidents and fires in london prompted everyone to switch to electricity... and then they never looked back.

Nuclear is simply a technology that is being filtered down... it will be even cheaper eventually... Just my thought
 
chris1983 said:
Well of course uranium explorers in Australia are in danger which is why I dont hold any of them.

I'll tell you the ones to buy :)

BMN/ERN/WMT
Click to expand...

Dont forget PDN.
 
bean said:
gone 100% cash. will be getting good uranium bargins in a few weeks. Uranium stocks as well as other stocks will go in the same direction as the ASX
Click to expand...

Not sure... I hold only one stock... MTN... their fundamentals are so good and are so bullish that they finished in the green today and finished the week right where they started... I think there will be a handful of stocks that won't react to the correction as much, and certainly uranium stocks are some... and then there is fewer that probably wouldn't react or barely...
 
CanOz said:
Uranium, from what i read, is not the future but the past. The future is Thorium, but how far away is this?

Why are we not building reactors to handle this? Can they be converted?

Less waste, more effeicient, peaceful (no weapons grade material as a BP)

:2twocents
Click to expand...
I did heaps of research on nuclear energy... It certainly is the future... it actually is the only future we have... The reason why uranium was originally selected for power generation was for the development of Nuclear weapons thanx to the USA... Thorium has a lot of positives such as being three times more abundant and the half-life being about half of uranium's. Also meltdowns don't occur... The negatives are... Requires constant electrical stimulation for nuclear fission to occur, it isn't as efficient so that also means more thorium must be processed to produce the same amount of power...

But remember modern day nuclear reactors are meltdown proof so uranium is safe
 
Nuclear, hydro and brown coal for power generation all have the same fundamental economics. Likewise solar and other non-biomass renewables. They cost a fortune to build and generate electricity at a cost far higher than it is actually worth at the time of construction.

The economics work well only under certain circumstances. You need cheap (borrowed) capital since this is in the order of 90% of total costs over the long term.

You need to get the plant built reasonably quickly otherwise the ongoing interest bill during construction leads to a massive actual investment by the time it goes online.

And then you need the price of electricity to rise to levels well above that prevailing at the time when construction commenced.

It works under the right circumstances. Victoria and Tasmania (and elsewhere) both underpinned their econonmies for decades using this strategy. In Tasmania's case it went as far as becomming the state's sole significant means of economic development.

And in both cases it went disastrously wrong when inflation rates dropped in the 1980's. The earlier brown coal and hydro plants were (still are) massively profitable but those which came online in the 80's and 90's are financial disasters by any measure.

And it's the same with nuclear. The same underlying economics as brown coal and especially hydro. It works as long as you get INCREASING rates of inflation. The moment inflation turns down, either the plant is already built or it's not going to be profitable.

Nuclear is basically a bet on increasing rates of inflation for fossil fuel generation for at least the next 2 decades. Same with anything that isn't black coal, oil or natural gas. They are not profitable now but they will be with enough inflation AFTER they are built.

That inflation could be either of the general variety or one specifically affecting fossil fuels, for example a carbon tax. But either way you need that surge in energy prices to make a profit building nuclear / wind / hydro etc with costs at least double the present price of electricity.

It's like entering a deal now to buy one house per year at double today's market value indexed to CPI for the next 10 years (so each identical house will cost more than the previous one) with no rental income during that period. Then you rent them out at the prevailing market price starting 10 years from now. It works as long as inflation rises but fails if it falls, the key being your locked-in cheap 30 year finance when inflation was lower. Same with nuclear, hydro / renewables, brown coal for power.
 
Please we know everything. If the markets go down so will stocks.
The reward risk ratio get out.
 
insider said:
I have to agree with you... to an extent... Once upon a time way long ago... back in the times of sherlock holmes, it was cheaper to have a house that was lit by gas than electricity... Eventually this technology was filtered down and heaps of devastating accidents and fires in london prompted everyone to switch to electricity... and then they never looked back.

Nuclear is simply a technology that is being filtered down... it will be even cheaper eventually... Just my thought
Click to expand...
And I would like to counter.

Nuclear power is still expensive despite half a century of perserverance. It is probably near the limits of its development.

Storage/ safety are an increasing concern and costs are bound to increase because of this. The world (apparently) according to what I have been told, only has enough uranium to supply current demand for another 30 years or so. I can't see how costs could ever become lower given these circumstances.

But then again, if India and China have a lot of nuclear waste, it isn't going to bother them. Given Indians already have significant heavy metal exposure, one more thing isn't really going to bother them. You could even plutonium as food though, apprently it has a metallic taste.

P.S. - I hear they are employing Indian rail engineers for their power plants.
 
BSD said:
I am not questioning your money making strategy in trading this stuff.

My point is that this type of strategy will not work when the majority of stocks drop 80% and lay dormant for years. Behaving like non-uranium explorers do in the early stage - no volume or volitility.

Plenty of guys that traded tech-rubbish had to go and get a job when the party ended.

You will want to be nimble when the lights get turned out.
Click to expand...


If we don't see a down spike but a return to real value in the producers........quickly/slowly whatever.

Some of these specks will be all that is on offer for volitility, shortlived passing of a monkey until the music ends...........not much of a reward to be passed on really
 
mmmmining said:
Friday's (yesterday) commodity report is on uranium.

http://www.robtv.com/

Time slot is 11:30am. The last a few minutes about uranium outlook is good to listen.
Click to expand...

Reminds me of my uni days. If this guy is right about the price elasticity of the uranium, doubling the price will make no difference to demand.

Currently hold 1500 PDN shares.
 
chris1983 said:
Nuclear is the future. Simple. Its clean.
Click to expand...

You must have been in diapers during Chernobyl 86.

The human weakness, and this is what drives the stock market, I'm sad to say, is that humans have a short memory span. Greed in the stock markets casts blinkers on most of us. the majority has been hyping up and driving the Uranium stocks, and it takes a little correction like this for people to sit back a little and take stock (no pun intended) of the situation.

But I"m sad to say that I too have subscribed heavily into the uranium madness, merely batting some eyelids about PDN's plans to leave tailings above ground in Malawi.

Good one there, Prof Frink. Nuclear is dangerous stuff and I do not agree to it being the no. 1 source of energy the whole world over.

But to answer accurately the origin of this thread, no, I do not think the URanium bull has stopped to smell the roses, yet.
 
Little1 said:
Reminds me of my uni days. If this guy is right about the price elasticity of the uranium, doubling the price will make no difference to demand.

Currently hold 1500 PDN shares.
Click to expand...
Let's have a look at actual costs for construction of plants versus running them. For reference the market value of baseload electricity in Australia is in the order of $35 - $40 / MWh long term average.

Sources. These are my own figures based on the following. Present oil spot price and AUD/USD exchange rate. Expected construction costs of currently proposed gas-fired plant and recent coal fired plant in Australia. Actual operating costs of modern Australian coal and gas-fired plants assuming gas supplied at typical contract rates (Victoria). Existing hydro operation costs and possible new scheme construction costs using data from the Hydro-Electric Corporation (Hydro Tas). Nuclear costs from various Canadian plants adjusted for recent increases in the uranium spot price and assuming that Australia developed a similarly large industry (since costs for one plant only would be higher per unit of production).

Oil (CCGT). Construction etc costs $19 / MWh. Fuel cost $92 / MWh.

Gas (CCGT). Construction etc cost $19 / MWh. Fuel cost $19 / MWh.

Black coal (conventional pulverised fuel). Construction etc cost $23 / MWh. Fuel cost $15 / MWh.

Nuclear. Construction etc cost $69 / MWh. Ongoing operation around $8 / MWh of which $5 / MWh is actual uranium at recent spot prices.

Brown coal (conventional pulverised fuel). Construction etc cost $60 - $65 / MWh. Ongoing cost $2 / MWh.

Hydro (large scale with no other use of dam over which to spread costs). Construction cost depends on site $40 - $150+ / MWh. Ongoing costs $2 / MWh.

As can be seen, an increase in the cost of uranium won't seriously affect the economics of nuclear power generation. That is one of its key attractions. Hence demand won't fall unless prices reach very high levels.

The overall economics of nuclear are at the same end as brown coal and hydro. It costs a fortune to build and is uneconomic based on present electricity prices. But its low ongoing cost, particularly with respect to fuel, makes it an effective inflation hedge. Given sufficient inflation after construction it becomes profitable as do brown coal and hydro since most of the total cost is locked in at yesterday's prices.

The above figures don't include costs of transmission lines etc to connect the plant to the grid. Nor do they include any decommissioning costs, construction of water supply infrastructure (except hydro) etc. It is assumed the plant is near the coal mine, major gas pipelines or coastal oil terminal as appropriate.
 
Smurf,

Relax, the last thing punters need is ASF back of 'pie bag' fundamentals on Uranium producers ATM.

Of the producers PDN is unhedged and their marketing board will be well placed to kill the pig or lock in hedges......no need to justify the obvious or justify the energy cycle....the whole world needs it! & uranium is a tighter commodity than most.
 
mmmmining said:
Friday's (yesterday) commodity report is on uranium.
http://www.robtv.com/
Click to expand...
thanks mmmm - that kline guy was a bit of a goose re Australian situation (eg nothing happening on 3 mine policy, therefore buy Canadian - i hope all the canadians heard and so impact of 29 april will be more significant...)

but he was good on the demand/supply stuff - pity it got cutoff - in summary:

SUPPLY

current supply is 60% of demand - there are currently buyers looking for 53mlbs - last sale was for 2mlbs

all U majors last year failed to meet their production targets due to range of reasons - mining lower grade veins / probs like cigar lake / political / strikes

supply scenario is tenuous - 5 yrs from now new supply


DEMAND

5 new facilities this year, 6 next yr, 10 in 2010
this is like fixed consumption because nuclear requires 5-10-15bn capital investment so they won't walk away just cause U price goes up

U is 2.5% of operating cost – minimal (cf gas 40% of cost curve)

Facilities require 2.5 yrs of supply on site by law [so those 2010 reactors would be in the market now?]

Hedge buyers and others are more active
 
56gsa said:
thanks mmmm - that kline guy was a bit of a goose re Australian situation (eg nothing happening on 3 mine policy, therefore buy Canadian - i hope all the canadians heard and so impact of 29 april will be more significant...)

but he was good on the demand/supply stuff - pity it got cutoff - in summary:

SUPPLY

current supply is 60% of demand - there are currently buyers looking for 53mlbs - last sale was for 2mlbs

all U majors last year failed to meet their production targets due to range of reasons - mining lower grade veins / probs like cigar lake / political / strikes

supply scenario is tenuous - 5 yrs from now new supply


DEMAND

5 new facilities this year, 6 next yr, 10 in 2010
this is like fixed consumption because nuclear requires 5-10-15bn capital investment so they won't walk away just cause U price goes up

U is 2.5% of operating cost – minimal (cf gas 40% of cost curve)

Facilities require 2.5 yrs of supply on site by law [so those 2010 reactors would be in the market now?]

Hedge buyers and others are more active
Click to expand...

56gsa, I cannot believe it, your summary is great and accurate.

Well, we should realize that the correction for uranium stocks is inevitable. It happened a few times in last couple of years. Sometimes, it is painful, could be 50%. But afterwards, most of them have reached new high every time.

If we can get the big picture, and basic facts about uranium and nuclear power right, we should feel confident to ride out the bad time.
 
Top