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MF Global News : Uranium May Drop 26% After Quake

Date: Thu, 17 Mar 2011

A record 8.9-magnitude earthquake and tsunami on March 11 knocked out the Fukushima plant about 135 miles (220 kilometers) north of Tokyo, with workers still battling to prevent meltdowns. Shares of Australia-traded Rio Tinto and BHP slumped yesterday because of concerns of falling reactor fuel demand from Japan, which gets about a third of its electricity from 54 atomic plants, the third-most after the U.S. and France, according to data from the World Nuclear Association.
     ``This adds a lot of uncertainty'' over the next year or two, said Simon Tonkin, an analyst at Patersons in Perth. ``The longer-term picture looks fairly bright. People need power. China's growing.''
     Uranium may sink as low as $50 a pound after the disaster in Japan, Tonkin said. Prices touched as high as $74 a pound on Feb. 3 from a low of $40.35 in March 2010, as countries including China boosted construction of reactors to curb carbon emissions.
     More than 155 additional reactors, mostly in Asia, have been planned and 65 are under construction, according to the World Nuclear Association. The London-based organization said 442 reactors currently supply about 15 percent of the world's electricity.

Uranium Chart from Bloomberg

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