Commodities sold in the international market must adhere to the dictates of demand and supply. When a particular product gets produced in more quantities than its demand in the market, its prices are bound to plummet to unimaginable proportions.
Many reasons can lead to such a thing happening to a commodity, and in the case of uranium, it is its enormous potential to cause catastrophic disasters. From recent forecast, it got revealed that there was an excess uranium product of 20 million pounds for the year 2018 with no demand or buyers for it.
True to the earlier statement of demand and supply the prices of uranium are significantly very low as compared to years earlier than the year 2010. The fate of uranium prices got sealed after March 2011 after the disaster that struck Fukushima Daiichi nuclear power plant.
Earlier that year in January the prices of uranium had hit all-time high selling a pound at $ 72.50 in the international market. Suddenly after March, no one wanted the commodity anymore and as such the downfall begun with its prices falling steadily for the next six years and finally hitting its lowest price in 2016 with a pound of uranium going for $ 18.75.
In percentage, the drop in the price of uranium was 74 percent. The price in 2016 for uranium was the lowest ever experienced in more than a decade. This fall in demand and price was shocking considering the potential the commodity had in the production of energy.
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Uranium had gotten embraced as the energy source that would ultimately rescue the earth from the pollution caused by the burning of hydrocarbons. It was safe to say that it was a “green” energy source, but after the disaster in Japan, no one wanted to get associated with its use.
Recent price indicators have revealed a change to come for the price of uranium with prospects that 2018 hold for the commodity. If we are to continue with the slow rise in the prices of uranium experienced in 2017, then the future of uranium is beginning to look bright again. This increase was due to production companies cutting down their production thus reducing the surplus already in the market.
As an expert in the mining industry, Matt Badiali is an exceptional man with vast knowledge concerning natural resources. His career has enabled him to travel to different countries associated with the mining industry.
Through his acquired knowledge he advises investors in the same industry on how to invest in potential commodities that would, in turn, earn them profits.