By Andrew Nelson

As the old curse goes; may you live in interesting times. And for the uranium market, last year contained surely some interesting times.

For the first nine months of 2012, Fukushima fallout continued to poison the spot market, with talk of Japan and possibly Germany planning to transition away from nuclear power making matters worse. Spot prices slid for most of the year, as buyers waited patiently for prices to fall even further. Uncertainty became the dominant factor driving spot prices.

Spot prices found a bit of a floor towards the latter part of the year and then the big news arrived. Japan's pro-nuclear Liberal Democratic Party won a landslide victory and the market started to count on a faster-paced restart program for the nation's 48 inactive reactors. All of a sudden, the risk of Japan winding down purchases and dumping stock was put to bed and uranium spot prices pushed steadily, if only a little higher into the end of the year.

Yet while it was inarguably a tough year for uranium spot prices, there was more than one silver lining to emerge. In fact, 2012 saw a number of positive developments for market fundamentals and an increasing number of industry analysts view some of these developments as at least early signs of a turnaround for uranium spot prices and for the fortunes of uranium miners.

Oft quoted David Talbot from Dundee Securities believes 2013 will see a re-ignition of the global nuclear renaissance. However, while the supply/demand picture is certainly improving, underlying fundamentals are not expected to have a real impact on the spot market until the second half of the year, when Japan's idled nuclear fleet actually begins to come back online.

The longer term outlook is a different story, with analysts consistently expecting ever increasing levels of demand as nuclear power expansion projects around the world gain traction. Countries such as China, India, Russia, Ukraine, the US, the UK, South Korea and even the United Arab Emirates, are all intent on growing their nuclear fleet.

The World Nuclear Association says 62 reactors will be under construction worldwide this year alone, with another 484 in the pipeline. China leads the way with 26 nuclear reactors under construction and a five-year plan for growing its nuclear program to an installed capacity of between 70 and 80 GWe by 2020 and possibly to 200 GWe by 2030. It doesn't take much of an imagination to see what this will do to demand levels.

According to The Australian, global demand for the nuclear fuel is expected to increase from 166 million pounds in 2011 to 226 million pounds by 2020, and should total 280 million pounds U3O8 by 2030. At the same time, there is a big question mark about how this demand will be fulfilled. Current production levels, combined with what's in various development pipelines, just isn't enough.

In the meantime, Japan remains the short term key and market enthusiasts are best advised to keep a close eye on Japan, as any real improvement in the broader market will likely not happen until the nation's newly anointed leaders prove they're serious about restoring the country's nuclear power program, which used to add up to about 10% of global uranium demand.

According to a report from Uranium Investing News, analysts believe demand will start to exceed supply in 2014. That means sometime in late 2013 or early 2014 we likely to see the spot price start to move more in step with the long-term price, which has remained fairly firm during the spot price meltdown of 2012.

Meanwhile, UBS is expecting prices to return to US$50/lb in 2013 and US$55/lb in 2014, while Credit Suisse has a much more bullish outlook, predicting uranium will trade in a range of US$80/lb to US$90/lb for 2013. JP Morgan is equally as bullish and expects a range of US$78/lb to US$85/lb in the year ahead.

In the meantime, the uranium price has seemingly run out of puff after its dash to the 2012 finish line. Industry analysts TradeTech report last week saw the spot price reverse its recently positive course on what was fairly thin, new year's trade.

There were a total of just seven transactions last week, which saw around 700,00 pounds of U308 change hands. The consultant notes that the week's trading started higher, but then some material was sold late in the week at just the prevailing spot. The silver lining here is that when prices did start to move lower, new demand started to enter the market. However, once the bargain sellers had cleared the floor, offer prices began to firm.

By the end of the week, TradeTech's Weekly U3O8 Spot Price Indicator was down US$0.75 to US$42.00 per pound, with buyers showing little interest in paying more than US$42.00.

The term uranium market remained a nice quiet place to get your reading done, although TradeTech reports there are a number of utilities that continue to evaluate offers.