Prime Minister Yoshihiko Noda of Japan recently declared that Japanese society “won’t function” without nuclear power, according to the online edition of the Daily Yomiuri newspaper.
The prime minister made the remarks at a press conference on June 8, concluding that both the No.3 and No.4 reactors should be restarted at Kansai Electric Power Co.’s Oi nuclear power plant in Fukui Prefecture, and that nuclear power is essential to the country’s mid- and long term stability.
The nuclear power issue has divided the nation since the Fukushima crisis in March, with opponents such as former Prime Minister Naoto Kan and others advocating the use of alternative energy sources. All domestic nuclear reactors in Japan suspended operations in May.
Noda argued that electricity prices in Japan will soar if the country raises its dependency on other energy sources such as oil, and added that oil imports can be disrupted, causing blackouts and other power interruptions that would have far-reaching implications.
Separately, New York-based Dahlman Rose & Co. hosted an executive forum on uranium on June 5 and concluded that the presentations and meetings reaffirmed the investment bank’s belief that uranium prices will “ultimately trend higher,” although the market will need to “digest some near term inventories.”
Industry experts anticipate that Japan will start rebooting its nuclear reactors over the next six months, Dahlman Rose noted. “While the country will not restart all 50 reactors this year, we would expect for the country to gradually ramp nuclear reactor restarts higher over the medium term.”
“While this may not have an immediate impact on near term supply/demand, improved sentiment will likely push spot uranium prices higher, in our opinion, which should have a positive impact on many of the equities in the sector.”
Project delays from permitting interruptions, labour stoppages and a challenging financing environment have already started to restrain supply, Dahlman stated in a note to clients on June 6.
“Limited supply, coupled with increasing demand as we expect that six to eight reactors will commence production every year for the remainder of the decade, should help to push prices higher.”
At press time, the spot price for uranium was $51.00 per lb, according to data from Trade Tech. (www.Uranium.info)
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