While uranium prices have finally stabilized, and the long demand outlook remains very positive, exploration around the world is increasing, at the same time short-term production is decreasing.
Iran, who recently purchased uranium from global markets after sanctions were lifted is now apparently seeking to boost domestic production. According to PressTV, over the weekend, Ali Akbar Salehi, the head of the Atomic Energy Organization of Iran in a televised interview noted that the country wants to boost uranium exploration and development so that it does have to rely solely on imports.”Over 70% of the country’s terrain has been subjected to aerial prospecting for uranium. Contrary to our previous perception, our country is not poor in uranium resources, and we will be able to satisfy our needs over the next several years,” commented the Minister.
In the nearer term, the fact that Iran is looking to increase production could be negative for the uranium market. In the short-term, there is an oversupply of uranium after the Fukushima nuclear disaster dented near-term uranium demand. Even though over the short-term, uranium demand is suffering, over the long term the outlook is positive as countries around the world expand the amount of electricity they obtain from nuclear facilities. The fact that Iran had been absent from international purchases for years and then re-entered the market earlier this year sparked some near-term demand optimism. According to the interview, Iran appears ready to fast-track uranium production and that could depress prices. But, over the longer-term, Iran is also expanding its nuclear power facilities and that will help it use up any increase in supply.