Due a disaster that had occurred more than two years ago, the uranium market is once again testing fresh low rates. An excessive supply of Uranium in Japan after the Tsunami is behind these low levels of uranium prices which have not been seen since December 2005.
Several of the 42 reactors that had been shut down after the meltdown at the Fukushima-Daiichi nuclear plant in March, 2011, have been prepared for restart by the Japanese utilities.
Japan also introduced legally binding requirements to strengthen their tsunami defences, check for any active earthquake faults under their plants, setting up of emergency command centres and also try to reduce the radioactive discharge from the reactors by installing filters.
The most traded uranium contract on the New York Mercantile Exchange saw a steep drop and reached $34.50 (US) per pound when the market closed. This is its biggest drop this year. Cameco Corp., which is a Saskatoon based produces, saw its share drop by 3.5 per cent and reached $21.13 (Canadian) on the TSX on Monday.
This is its lowest price since mid-May. It is believed that by the end of 2013, almost 6 to 8 nuclear reactors would be operational in Japan. However, the Japanese Nuclear Regulatory Authority would take almost eight to nine months to complete all the necessary inspections. Another report indicated that these restarts would not affect the uranium prices much.
It is also reported that the regulatory moves would proceed little slowly to give ample time for the uranium price to rise a little. It is estimated that Japan was planning to sell off its excess uranium inventory which is around 90 million points according to Trade Tech. This would have further dragged the prices of Uranium down.