Uranium shares cheer pro-nuclear Japan
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Uranium producer Paladin Energy's shares shot up on Tuesday as a buoyant nuclear industry cheered the election of a Japanese government expected to more quickly turn the reactors back on.
The conservative, pro-nuclear LDP is expected to implement a more aggressive restart schedule after the Fukushima nuclear disaster of March 2011.
The disaster led to the shutdown of Japan's reactors that represented 11 per cent of global demand, as well as the shutdown of Germany's nuclear plant.
Both countries are among the world's largest users of nuclear energy, which fell out of favour after Fukushima as uranium prices plunged.
A regulatory decision is expected in Japan in April.
Paladin was best-performing stock among the top 100 ASX equities climbing 12 cents, or 12.44 per cent, to $1.085 following an 8.4 per cent jump on Monday.
Swiss investment bank UBS upgraded the company to a buy, saying it saw market conditions improving for uranium.
Fellow miner Rio Tinto-owned Energy Resources of Australia, a bigger uranium producer than Paladin, was third-best among the ASX100 improving by nine cents, or 7.3 per cent, to $1.33.
Equity research group Resource Capital Research (RCR) released its quarterly uranium sector review on Tuesday, pointing to an increased price driven by a large supply gap.
The planned restart of the Metropolis conversion plant in the US next June also caused a bounce in the uranium price, the RCR report said.
Prices are still well below pre-Fukushima levels with the current spot price recently improving to $US43.50 a pound, but still well below the $US67.75 a pound of March last year.
Current contract prices are $US59.50 a pound compared to $US73 a pound pre-Fukushima.
Demand for uranium was expected to increase by 38 per cent by 2020 to 226 million pounds a year but current supply was only half of that, RCR said, with BHP Billiton's delay of the Olympic Dam expansion a major contributor to supply, as well other deferrals or uranium projects.
There are 484 planned and proposed new nuclear reactors globally, supporting price rises, with support and demand led by China and India.
An exception to the bullish performance by uranium stocks was Toro Energy, whose shares tanked after a surprise delay in the Federal Government's decision on its planned Wiluna Uranium project in Western Australia.
The decision due on Tuesday has now been delayed 30 days and Toro shares closed 4.4 per cent weaker at 11 cents.