Uranium: Is the bottom near...for the Yellow Cake!

Now I've been following the Uranium Prices for some time purely for the "long trade", as the short trade has been harder to evaluate as distressed traders attempting to wait it out then dropping their stock/positions into market at near any price. 

What did start to make me think that the market was turning was when Goldman Sachs and Deutsche Bank put the 'for sale' sign on Iran's old uranium supplier. Most traders must be sitting on significant losses based on the trading of Uranium specifically some banks that got into trading the cake.

Niger's main Areva mines appear to be on Care and Maintenance. There's also some taxation jostling which has contributed to the lower production as Areva renegotiate historic taxation and royalty contracts that look to benefit Niger for the first time since the 1970's far greater than the benefits Areva have had. The list of tax breaks and concessions is endless (as per Reuters) and appear to be "made at any cost to the country". More importantly Niger look to have tired of the iron first of Frances demands and look to amend their existing mining and taxation laws to enable them to increase their slice of the action. 

The market will start to change direction on Uranium especially in-light of Japan's restart to their Nuclear Generation, after all there weren't many other options. Perhaps a greater "regulation" but it looks as though there will be a steady flow of Uranium deals over the coming months both in merger and acquisitions but also the 'positive' news flow that will prompt these deals. 

Having been following Uranium all the way down, it doesn't make the person an expert of change, but with a significant number of companies limited in growth or even production at the current levels, its more than likely supply/demand & more importantly speculation, will lead to a significant rise to a range of around 46-49$/kilo over the next 12 months. Yes a punchy 35-40% increase, but let’s face it, Japan blighted the market as a result of the Fukushima disaster, so reopening will contribute to the returns to a 'more balanced market place as demand increases.' Albeit I'd be very surprised if it was immediately, there are a lot of banks sitting on stocks that need to unwind these positions, so perhaps a similar occurrence to the Platinum Market in the short-term. 

Japan Plan Keeps Nuclear as Key Energy Source AP Article