Why I’m Convinced the Second Wave of Uranium’s Bull Market Is About to Begin!

Uranium is the “white-hot metal,” and not only because it glows in the dark. During the course of 2006, the uranium spot market price continually climbed by 99%, from $36.25 to $72 per pound of U3O8. At $75 per pound, the price is now more than 10 times its record low of $7 per pound that it hit in 2000.
The first big move in uranium is over -- the next one is about to begin. And if uranium prices DOUBLE from here -- which I think could easily happen -- some of these small-cap wonders I’m looking at could go to the moon.

I believe we’re poised to enter the “Second Wave” of uranium’s big bull market…probably the biggest bull market the world has ever seen.
Despite the big bull rally in uranium over the past couple years, on a historical basis, it’s still dirt-cheap! Uranium hasn’t come anywhere near its old peak in inflation-adjusted terms. In 1978, uranium topped out at $43.40 per pound -- but adjusted for inflation, that’s around $145 per pound in today’s dollars. It’s now trading at $75 per pound. That means uranium could nearly DOUBLE and still not surpass its old inflation-adjusted highs.

That’s why I think we’re looking at $100 uranium by the end of this year -- a 39% move from recent levels. Pretty sweet -- and even then, uranium will still have plenty of room to run! How high? Let me show you…

Continued:

Force #1: The Supply/Demand Gap

Consider these facts...

1. About 16% of the world's electricity came from 440 nuclear reactors last year, according to the World Nuclear Association. Currently, there are 28 reactors under construction around the world and another 62 being planned:

Japan intends to add 11 by 2010
China hopes to add as many as 30 by 2020. More on China in just a bit…
India wants to build up to 20 more
Russia’s energy goals call for at least 42 new nuclear reactors...perhaps as many as 58!
2. An additional 100 plants will be built in the next 10 years, with 40 of them in Asia.

3. Bottom line: By 2050, scientists estimate the world will need about 900 more nuclear power plants to keep up with growing energy requirements.

As a result, the undeniable reality is that demand for uranium is outstripping supply. In 2005...

Supply from mines was 102.5 million pounds
Demand was 171 million pounds
The gap was 68.5 million pounds.
Totals for 2006 aren’t in yet, but demand probably topped 180 million pounds. And as new nuclear power plants come online, that demand will grow. A typical 1-gigawatt nuclear reactor requires around 200 metric tonnes of natural uranium per year. During startup, a new nuclear plant can use TRIPLE its normal requirements.

The fact is production from world uranium mines now supplies only 62% of the requirements of power utilities. The rest is made up from rapidly dwindling stockpiles, mainly old Russian nuclear warheads that are converted to material for power plants. That agreement expires in 2013, and won’t likely be renewed, since the Russians have a very ambitious nuclear program of their own.
Moreover, here in the U.S., utility consumption of uranium outpaces U.S. uranium production by more than 20-to-1

I have recomended USU in the past and it has moved up nicely. It has a considerable way to move yet, buy it on dips for accumulation for the next few years. You should double your money in 3 years on this pick.