In a report to clients on Wednesday, Paul Wong, market strategist at commodities-focused investment firm Sprott, and Jacob White, product manager for ETFs, described 2023 as a “blockbuster” year for uranium miners, with the spot price of uranium climbing by 88.5 per cent to end the year at $91.09 a pound. Long-term fundamentals for uranium remain bullish and the upward trend is likely to continue into 2024,” the report reads.
The Sprott Uranium Miners ETF has climbed 16% to start 2024. By comparison, the S&P 500 Index started the year down 0.6% after rising 52% in 2023. One of the best-performing individual stocks in the ETF, Premier American Uranium Inc. is up 90 per cent so far, and CanAlaska Uranium Ltd. is up 55 per cent.
On the Toronto Stock Exchange, shares of Cameco Corp. (CCO:CA), North America’s largest uranium miner, are also up 13 per cent, extending a cumulative 95 per cent rise over the past 12 months.
Market participants noted that the recent coup in Niger and Kazakhstan’s “chronic inability to meet production guidance” on uranium production had also added to the uncertainty over security of supply.
Twenty-two countries around the world have now pledged to triple their nuclear power capacity by 2050. This, coupled with the passage of the Prohibiting Russian Uranium Imports Act by the US House of Representatives in 2023, has led Sprott to expect utilities to avoid transactions with Russian companies in the future.
Uranium and uranium miners could be the ultimate beneficiaries, given the fundamental supply gap in the uranium market.
