3 Metals to Watch For - 2/4

Warning: White, hot uranium is about to get even hotter! That's is our first metal!

Uranium has been a standout performer for the past couple years, & the price of the metal has only gone up. But in the last few months, we've seen uranium stocks move lower as investors take mega-sized profits. I don't think the disconnect will last long. Why?

Well, uranium demand is going to double by 2030. That's the view of the World Nuclear Association (WNA), which has a pretty good handle on these things. The WNA expects a lot of the demand to come from China, India, Russia & other countries that are cranking up their nuclear programs.

Plus, global demand is just one part of the equation. U.S. utilities have a lot of catching up to do!
In its annual uranium marketing report, the U.S. Energy Information Administration determined a total of 276 million pounds of unfilled uranium contracts exist for the period from now through 2016.

And that's just for existing reactors — there are a bunch more in the planning stages. They'll all need to be fueled as well. In fact, a typical 1-gigawatt nuclear reactor requires around 200 metric tonnes of natural uranium per year. But during start-up, a new plant can use triple its normal requirements.

Too bad the supply/demand squeeze is already python-tight. According to UX consulting, in 2006, there was a 70-million-pound gap between the amount of mined uranium & the amount demanded by the market.

And an ever-more frantic feeding frenzy is taking place as uranium miners snap each other up for resources and personnel — there are so few trained personnel that a trained uranium geologist is worth his weight in … well, uranium!

You can see why I believe the price of uranium could easily double in the next 12 to 18 months. And why some uranium stocks are dirt-cheap when you take into account the rapidly growing value of their pounds in the ground.