DENVER, CO--(Marketwire -07/28/11)- Although near-term uranium demand is expected to decline as the nuclear power industry re-evaluates future growth following the Fukushima nuclear crisis in Japan, there exists a potential opportunity for uranium producers, according to industry analyst TradeTech.

Uranium from secondary sources, which today provide about 40 percent of total uranium supply, is expected to drop dramatically to less than 40 million pounds uranium oxide (U3O8) by 2014, as a US-Russian agreement to dismantle and downblend Russian nuclear weapons into uranium for commercial nuclear plants is not expected to be renewed after its 2013 expiration date. "This deficit leaves an opening for new uranium production to fill the supply gap and provides an opportunity for uranium producers with low-cost, high-grade mining projects to find a place in the future uranium market," TradeTech President Treva E. Klingbiel told attendees at the 2011 Australian Uranium Conference in Fremantle, Western Australia on July 20. "If we adjust our expectations for production expansion -- removing those projects that are high cost, politically sensitive, or lack financial backing, there exists a potential tight supply/demand situation over the next few years," Klingbiel explained.

David Fuller's view This helps to explain the recent up-tick in uranium shares, as you can see from this sampling: Cameco (weekly & daily), Denison Mines (weekly & daily) and Uranium One (weekly & daily).

The break in the progression of lower rally highs since Fukushima is encouraging in that it suggests that the bottoming out phase may have commenced within the earlier base formations. Recovery is still likely to be a lengthy process but we may have seen the lows. Uranium miners hold valuable resources in the ground and demand will eventually increase.