Worth a read3 Sep 2013 14:16
RFC Ambrian suggested in a recent detailed note on the commodity that it is too soon to write nuclear off completely.
"We believe that the fundamentals for a recovery are still very much in place and that there are a number of industry catalysts in the short-to-mid-term that we think will lead to the mid-to-long-term growth plans eventually being realised," said analyst Duncan Hughes.
He suggests now is a time for investors to take another look at uranium firms ahead of an anticipated increase in demand.
Uranium shares have yet to recover from the sell-off after Fukushima, says Hughes, noting as a group they are over 60% below the levels of March two years ago.
He sees prices picking up in the short to mid-term citing a number of reasons, including the fact the Megatons to Megawatts’ (M2M) agreement between the US and Russia expires this year, meaning a significant source of secondary supply will simply be removed from the market.
The agreement established in the early 1990s was to convert the enriched material from dimantled Russian weapons into something which could be used to generat energy.
"On top of this, demand is set to increase from China, Russia and India through the construction of an estimated 48 new nuclear reactors,” he says.
"Globally, the IAEA reports that there are 68 reactors under construction.”
Hughes also notes that countries critical to the fleet of global nuclear reactors, including China, India, South Korea, Russia, and Japan, now all have pro-nuclear governments and face looming energy crises.
In terms of companies, the broker hones in on projects that it sees as substantially undervalued and that have significant exploration upside, mainly in Namibia, Europe and the US.
Among the juniors, it rates Anatolia Energy (ASX:AEK) a 'speculative buy' - the same rating it gives to Berkeley Resources (LON:BMR), Deep Yellow (ASX:DYL), Peninsular Energy (ASX:PEN), European Uranium, and Uranium Resources