Bloomberg Market Specialists Eziz Jumayev, Adam Cohen, and Takuya Nagasawa contributed to this article. The original version appeared first on the Bloomberg Terminal.
Background
Investors are flocking to uranium producers, betting the nuclear power industry has a crucial role to play in the energy transition. Leaders in Japan and the U.S. have pushed to support their existing plants and restart dormant facilities to address power strains. Meanwhile, BloombergNEF expects Asia to lead in new reactors under construction.
By contrast, German Chancellor Olaf Scholz has rejected calls from lawmakers to reverse the country’s decision to phase out nuclear energy. Germany’s last active nuclear power facilities were shut down in April.
Meanwhile, net inflows into the Global X Uranium Exchanged Trade Fund are rising after a coup in Niger spurred supply concerns. Uranium supplier Cameco Corp. is forecast to see a sales boom.
The issue
The Global X Uranium ETF soared more than 20% from a March low as uranium spot prices moved higher and cumulative money inflows increased.
Mentions of nuclear energy among global energy companies jumped to the highest in at least five years during the first quarter. The trend is driven by surging interest in topics related to the environment and climate change. Cameco was among the top five by mentions.
“All over the world, we’re continuing to see government policies and corporate decisions that are generating positive news flow in support of strong growth for nuclear,” said Cameco CEO Tim Gitzel in an Aug. 2 earnings transcript. “Very importantly, those policies and decisions are being followed up with proposals, commitments and actions.”
Analysts forecast Cameco’s sales volume of uranium will continue to rise over the next couple of quarters, albeit with production slightly lower than in the first two quarters of 2023.
Uranium U308 weekly spot prices surged 27% in 2023. The latest breakout was partly driven by concerns over tighter supply availability after a July military coup in Niger, the world’s seventh-largest miner.
Meanwhile, the Asia-Pacific region dominates new reactor construction, with 37 reactors (34.7 GW) underway that will account for nearly 65% of the global market. The need to replace fossil fuels fast enough to head off extreme global warming means continued demand for nuclear energy, according to BNEF analyst Chris Gadomski.
“Looking ahead to 2030, our analysis suggests that the number of reactors that will join the global fleet will exceed the number that retire from service this decade,” he wrote.
Tracking
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