Nuclear and especially the fuel that powers it – uranium – was all the rage in 2023. The uranium price doubled, and uranium miner’s share prices soared! Since then, the uranium price is down to just under $80 per pound. And as a result, share prices have “crashed”. So, is the “Nuclear (Uranium) Boom” over?
Why nuclear power demand is accelerating!
There have been several huge nuclear developments in recent months:
China approved a record 11 new nuclear reactors investing $31 billion. By 2030, China will become the world’s top nuclear power generator, surpassing France and the US.
In addition, with the approval of 10 new reactors in each of the last two years, China has more nuclear reactors under construction than any other country in the world
Russia recently proposed building 11 new nuclear plants by 2042…
Since the US revealed the “Prohibiting Russian Uranium Imports Act” in May 2024, at least five previously shut uranium mines have been reactivated in response to accelerating demand for nuclear power.
Governments like Japan and Canada are considering restarts and extensions of nuclear power plants. And European countries such as Belgium, Bulgaria, Croatia, Czechnia, Finland, France, Hungary, Italy, the Netherlands, Poland and Sweden were among the signatories of a declaration, which called on regulators to “fully unlock” the potential of nuclear.
Simply put – demand for nuclear power generation is accelerating!
But what about supply?
Last month, the world’s largest uranium producer – Kazatomprom – slashed its production targets for 2025 due to project delays and sulphuric acid shortages. Both these reasons mean the uranium giant also won’t commit to its 2026 production guidance.
Kazatomprom which generates around 20% of global uranium supply cut its production targets by 17%. And to make matters worse, inventories are running at the lowest ever.
As a result, Kazatomprom and other large uranium miners have had to buy uranium from commercial inventories such as the Sprott Physical Uranium Trust.
This could be the real reason why the price of uranium is down this year.
However, Sprott noted by the end of 2024, these supplies will come to an end meaning in 2025 and beyond, there will not be enough uranium supply coming online to meet demand.
That according to experts, should see uranium prices pass the $100 level it achieved in 2023.
So, what’s next for uranium investors?
Energy is a strategic, long-term play, a “must-invest” sector. And the rise of power-hungry AI and data centres makes it even more attractive. In my view, nuclear power is the best solution to growing demand for AI and Data Centres.
The renaissance in nuclear power is accelerating. Sure, there will be volatility in the short term for uranium miner share prices, but not a day goes by without news confirming our thesis that nuclear power will grow rapidly to become a major source of power.
It may be fair to say the future of energy is, to a great extent, the future of nuclear power.
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