Uranium contracts rose slightly after a joint statement from the US and EU. “The West” has indicated that any effort to undermine energy markets and avoid sanctions will be “directly confronted”. An important statement was also made for the nuclear sector. Cooperation to reduce dependence on Russian nuclear fuel will be intensified by the United States and the EU. A transatlantic conference on advanced nuclear reactors is to be held this year. Nuclear energy can be seen as an alternative to conventional energy resources, on which Western economies are heavily dependent. Cameco (CCJ.US) and Constellation Energy (CEG.US) stocks edged higher ahead of the market open. Due to its high ROIC, nuclear energy can be a “cheaper” source of energy, the demand for which is likely to be increased, among other things, by the share of electric cars. In this way, it can help become more independent from the oil market, which is heavily influenced by OPEC+. Both the UK and the EU have recognized nuclear energy as ‘green’. Also in Japan, a country extremely negative about uranium after “Fukushima”, agreed to build new power plants and restart 17 reactors.
Futures contracts set the price of a pound of uranium above $50 and keep the commodity in an upward trend. Source: Trending Economics
- Cameco announced the reopening of its McArthur River mine, the largest conventional mine in the world. The Canadian giant, in collaboration with Brookfield Renewables (BEPC.US), acquired Westinghouse Electric, a nuclear power plant developer of state-of-the-art small SMR reactor designs (49% stake in Cameco, 51% stake in Brookfield, respectively). On the other hand, The world’s largest uranium producer, Kazatomprom (KAP.UK) forecasts production growth in the range of 8% to 14% by 2024.
- Other companies likely to benefit from improving sentiment around nuclear power include Uranium Energy Corp (UEC.US), which is trying to recover after a recent report by the Kerrisdale Capital fund, and Constellation Energy and (CEG.US), the largest operator of nuclear power plants in the United States (21 reactors). Through Constallation Technology Venturs, the company is researching modern power sources, including SMR reactors. ETF Global X Uranium (URNU.DE) reaction to joint US-EU clarification remains relatively subdued
L’ETF Global X Uranium (URNU.DE) recently weakened against the performance of the Nasdaq (yellow line). It was unable to sustain the gains of late 2021 and early 2022, but potential uranium supply issues could help Western companies rebound. Nuclear energy is gaining ground and deliveries of uranium and nuclear products from Russia could be stopped. Kazakhstan’s supply chain, on the other hand, could be constrained by China, which reports growing demand for Kazatomprom’s uranium resources. Source: xStation5
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