It’s taken
a long time, but the uranium sector is finally seeing the signs of a turnaround.
Instead of an immediate spike in uranium prices, however, what we’re seeing is the foundation for a recovery for uranium, and potentially nuclear energy, in 2020 and the new decade.
The catalysts of the initial drop were many countries moving away from nuclear energy following the 2011 Fukushima Daiichi disaster in Japan. The result has been a glut in supply and a shortage of demand, but as the costs have started to materialize and the climate change crisis puts the spotlight on zero-emission energy sources, the nuclear pendulum started swinging back.
First we can look at the US, where uranium stocks noticeably rose in December. The reason? A recent report from the US Nuclear Fuel Working Group to US President Donald Trump
encouraged the purchase of uranium from American miners, and the markets
expect the administration to follow through.
And the US is not the only North American country with nuclear energy being looked at. Right here in Canada, the provinces of Ontario, Saskatchewan and New Brunswick teamed up for the
development of small modular reactors that will use nuclear energy, reduce the use of coal, and lead to a reduction in carbon emissions. Even in Germany, where the government shut down its nuclear plants in 2011,
the full costs are causing many to rethink their decision.
The initial pushback against uranium and nuclear power weren’t worldwide, either. While nuclear capacity is expected to remain relatively stable in North America and Europe, Asia’s demand for nuclear reactors is making up the difference in spades: In addition to the 450 nuclear power reactors
currently in operation worldwide,
another 50 are under construction, 100 more are planned, and 300 additional reactors are being proposed.
All of this is coupled with the stirring of major uranium moves.
Uranium Royalty Corp. (
TSX-V:URC) raised $30 million in its IPO and
is targeting sector acquisitions ahead of a turnaround it expects starting in 2020.
Is the price of uranium shooting through the roof right now? No, in fact, it fell towards the end of December. But between more reactors, a push for new safe nuclear energy proposals, and governments looking at purchasing uranium, you can expect the pendulum to swing back this year, and given the long-term impacts being discussed, beyond.
If you’re looking for additional uranium stocks, you should become familiar with some of the names in the field. The big ones include
Cameco Corporation (
TSX:CCO) and Australia-based
Paladin Energy Ltd. (
OTC:PALAF), while for smaller-cap options, both
Azarga Uranium Corp. (
TSX:AZZ) and
Fission UraniumCorp. (
TSX:FCU) have been highlighted by Stockhouse users in the past.
For more of the latest info on Metals & Mining stocks, check out the Metals & Mining Trending News hub on Stockhouse.
FULL DISCLOSURE: Fission Uranium Corp. and Azarga Uranium Corp. are clients of Stockhouse Publishing.