Q1 2024 Uranium Market in Review, Plus List of Top Canadian Uranium Stocks

Uranium Market in Review
Published on: Apr 12, 2024

In 2023, the uranium spot price surged by 86.41%, reaching a 17-year high of $106 per pound in January 2024. On March 11th, the price dropped below $90, although it still remained at historically high levels. Despite a consolidation phase in uranium prices in the first quarter, market participants remain optimistic about the long-term trend of uranium prices, with Canadian uranium stocks also showing decent performance.

One key reason for the bullish outlook on uranium prices is a structural shift in market supply and demand dynamics. Against the backdrop of energy transition, nuclear power has once again garnered attention from governments worldwide as an indispensable solution for ensuring energy security. In March this year, Scott Melbye of Uranium Energy Corp (AMEX: UEC) and Uranium Royalty Corp (TSX: URC) (NASDAQ: UROY) expressed optimism about the energy fuel price trend, stating that in the current environment, there are no factors hindering uranium prices from reaching $150 or even $200.

Let’s first discuss the supply side. Currently, annual uranium production in the market falls significantly below the current demand levels, indicating that supply shortages are expected to persist or worsen, serving as a long-term driver for uranium prices. The fragility of the supply side remained a key theme in the first quarter, highlighted by reports suggesting that Kazakhstan’s uranium production for 2024 will fall well below expectations. On February 1st, Kazatomprom, the world’s largest uranium miner based in Kazakhstan, confirmed production cuts citing a shortage of sulfuric acid, leading to adjustments in its 2024 production guidance.

Data from the World Nuclear Association (WNA) indicates that in 2022, global uranium production met only 74% of demand. As Asian countries continue to increase their nuclear reactor capacities, this figure is likely to decrease further.

Moving to demand, during the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) held in Dubai in December last year, 22 countries signed a joint declaration aiming to triple nuclear power capacity by 2050 compared to 2020 levels. Currently, 440 nuclear reactors are operational, with an additional 13 expected to come online this year, and an estimated 47 reactors set to commence electricity generation by 2030.

The market’s supply-demand dynamics serve as long-term support for bullish uranium prices, while geopolitical risks and trends towards resource nationalization act as catalysts for price increases.

Against a backdrop of global nuclear energy expansion and increasing tensions between Russia and Western countries, establishing North America’s own nuclear power capacity becomes particularly crucial. Nearly 20% of the United States’ electricity is sourced from nuclear power, requiring an annual uranium import of up to 40.5 million pounds. According to data from the U.S. Energy Information Administration (EIA), 27% of the country’s uranium imports come from allied nation Canada, while imports from Russian-allied nations Kazakhstan and Uzbekistan constitute 25% and 11%, respectively.

Below is the list of Canadian uranium stocks with the highest price increase in the Canadian stock market (including TSX, TSXV, and CSE) as of April 9, 2024, with a market value exceeding CAD $10 million.

Company Name Year-to-Date Price Increase Market Value Stock Price
District Metals Corp (TSXV:DMX) 140.63% CAD 41.8 million CAD 0.38
Greenridge Exploration Inc (CSE:GXP) 78.72% CAD 13.89 million CAD 0.84
Myriad Uranium Corp (CSE:M) 78.38% CAD 11.27 million CAD 0.33
CanAlaska Uranium Ltd (TSXV:CVV) 71.43% CAD 98.61 million CAD 0.66
Premier American Uranium Inc (TSXV:PUR) 69.68% CAD 41.45 million CAD 2.63

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