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While concerns about a potential economic downturn have hurt most energy-related commodities, Uranium is still glowingAs uranium spot prices are up 18% so far this year, the Sprott Physical Uranium Trust (OTCPK: SRUUF) is up 8% and global X Uranium ETF (New York: Career) earned 6%.
Some industry analysts believe that uranium has room to rise even higher, according to him The Wall Street JournalJinjoo Lee on “Heard On The Street”: BofA Global Research expects spot uranium prices to reach $75/lb by year-end 2025, while others see prices rise to around $60 by then.
One clear sign of the market’s tightness is the cost of uranium enrichment, which has risen from $60 per separate business unit before Russia’s invasion of Ukraine to $140 today, according to Jonathan Haines, president of UxC, a nuclear fuel consulting firm.
Uranium demand has seen a boost as some countries look to extend the life of existing nuclear power plants, and the US Inflation Reduction Act created a tax credit for existing nuclear power plants, giving them an incentive to keep operating.
On the supply side, BofA Securities projects a production shortfall of 60 million pounds of uranium triocoxide by 2035, roughly equal to the annual production of Kazakhstan, the world’s largest producer.
Potentially related stock indices include (CCJ), (DNN), (UUUU), (UEC), (URG), (NXE), (SMR), (OTCQX: FCUUF)
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