The uranium industry might finally be on the road to recovery as some expect demand from major energy consumers China and Japan to rise in 2013.

“The biggest pressure on price at the moment is not necessarily the downgrade to demand since Fukushima, it’s this massive inventory overhang,” said Morgan Stanley’s vice president of research, Joel Crane. “Should the Japanese government give the green light to restarts, that overhang is instantly gone and that will be very positive for prices.”

Analysts’ uranium price forecasts for 2013 range from $45 to $62.60 a pound according to a survey conducted by Bloomberg news. Prices for yellowcake last year declined 14% to average $48.72 and hit a three-year low in November at just north of $40 per pound.

Speculation that uranium demand is on the rise has been gaining momentum since Japan’s Liberal Democrat Party regained power. The country’s previous government, the Democratic Party of Japan, had plans to phase out nuclear power by 2030. Some speculate that a policy change may be afoot.

“We can’t say for sure that Japan will be free of nuclear power by the 2030s,” Trade Minister Toshimitsu Motegi said at a news conference in Tokyo. “We will make our decisions based on technological findings and not with prejudgment.”

The Global X Uranium ETF (NYSE Arca:URA) is up over 12 percent in the past month bouncing off its 2012 low of $5.73 to reach just under $6.90. While Cameco (Stock Profile – TSX:CCO & NYSE:CCJ) has tacked on over $3 per share since reaching its 2012 low of $16.41 in November. Cameco, a global leader in uranium production, currently supplies 16% of the world’s uranium production from its mines in Canada and the United States.

Denison Mines (Stock Profile – TSX:DML & AMEX:DNN) a uranium company with operations in Saskatchewan, Zambia and Mongolia has also rallied nicely gaining 25% over the past two months.

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