Why the uranium price is set to soar
http://www.moneyweek.com/investments/commodities/why-the-uranium-price-is-set-to-soar.aspxSummary
This article talks about the uranium price surged from $5 to $29 in just two weeks last year. China, India and Russia plans on to build new reactors and more reactors would cause a run on the limited supply of uranium. In the next 15 years, 130 new nuclear power plants will be built. Nuclear power provides about 16% of the planet's total annual electricity generation. France receives 78% of its electricity from nuclear power, Belgium gets almost 56% of its power from nuclear plants and Sweden's power is close to 50% that is nuclear.
Connections
In Chapter 2, the textbook talks about factors affecting demand and supply. The increase in demand of Uranium will result the demand curve to shift right. As more uranium being demanded, regardless of the price before. There will be a change in supply. As uranium increases in productions costs, the supply curve will result to shift left. Then the same amount of uranium will be supplied to the market at a higher price to earn profit.
Reflection
In my opinion, as the uranium price continues to rise in the future. Demand will increase, no matter what the cost is. Lot of countries are in need of uranium for power plants to produce electricity. People need electricity to survive, such as heat. The countries which uses uranium for electricity, need to find another way to get electricity due to the supply of uranium. As supply goes limited, demand rises.
I agree with Johnny's comment about as uranium prices are continuing to rise, demand will continue to increase because in some countries, uranium is a inelastic product that doesn't have an easy substitute. Electricity is indeed a basic necessity for all countries. It's needed for production and lots of important factors that help strengthen and build the growth of a country. I also agree with the point stated that countries that depend too much on uranium should try to find cheaper and more efficient alternatives if possible. There are other alternative sources of energy such as hydro power or wind power to generate electricity.
ReplyDeleteThe demand for uranium will no doubt continue to rise as prices for uranium rises clearly because uranium is used for power plants to produce the necessity of electricity. I agree with your point that "demand will increase, no matter what the cost is" because uranium provides us a sustainable source of energy that we cannot live without. Solutions to reduce the soaring prices of uranium is possible with wind and water to generate electricity as what Jackie mentioned above.
ReplyDeleteI agree with Johnny. The price of uranium will continue to rise because without uranium, people can't produce energy in power plants around the world. Electricity is needed for a lot of things from health care to producing foods and keeping people warm from the cold winters. Countries that depend on uranium should find other alternatives such as converting wind into energy using wind turbines, or building dams by rivers to produce hydroelectricity.
ReplyDeleteIt is very interesting to learn that in 15 year the amount of nuclear plants will rise by 130. With the cost of uranium rises so rapidly, we should predict that the cost of uranium will be in the triple digits. This will cause the supply of uranium to fall, or, the demand for uranium will decrease. The demand will decrease because of countries locating alternate ways of electricity instead of nuclear plants. To conclude, i agree with you, Johnny, because countries need to have electricity for heat and other factors in survival, and we cannot survive with nuclear plants if the uranium count is depleting.
ReplyDeleteI really agree with Johnny. Uranium's inevitable rise of price and demand should push us to find more efficient ways to produce energy. Or perhaps in the future we could obtain uranium from extraterrestial properties. I hear on the news that scientists are already coming up with a way to use the force triggered by the huge waves of the ocean as a source of energy. Unfortunately, new technologies like these cost alot and is impractical at our economic stage.
ReplyDelete