When the uranium market picked up earlier this year, everyone involved in the market got excited, but wary. Despite the
expectation of a renewed uranium rebound in 2020 and beyond, the sudden rise was unexpected and potentially shaky.
After all, a driving factor at the time was the COVID-19 pandemic. As the coronavirus shut down economies and mines around the world, the largest uranium producers were included in those shutdowns and a supply glut turned into undersupply and expected shortfalls seemingly overnight.
But as April turned into May, uranium spot prices remained strong. Now halfway through June, the once magical climb of U3O8 spot prices above US $30.00/lb looks more like the setting of a new floor, with prices above US $34.00/lb.
For a market still well short of 2011 numbers, the marks of a prolonged resurgence is what investors were waiting for, and has created renewed interest in uranium activity and investment. With market drivers indicating increased nuclear energy usage and nuclear demand in coming years, and the supply glut dwindling by the day, mining investors are finding more confidence in looking for new supply.
That means investors need to keep their eyes not just on uranium majors like
Cameco Corporation (
TSX:CCO) and
NexGen Energy Ltd. (
TSX:NXE), but juniors and exploration small-caps as well. Activity has picked up across the board, and companies with stronger established uranium findings like
Fission UraniumCorp. (
TSX:FCU),
IsoEnergy Ltd. (
TSX-V:ISO), and
Azarga Uranium Corp. (
TSX:AZZ) have hung on to increases in share prices better than others as the general market has showed signs of weakening.
(Six-month price chart for Fission Uranium)
And for small-cap hunters looking for exploration plays, there is no shortage of activity.
UEX Corp. (
TSX:UEX),
Azincourt Energy Corp. (
TSX-V:AAZ) and
CanAlaska Uranium Ltd. (
TSX-V:CVV) have all been keeping busy (alongside the companies mentioned above) in exploring and establishing new uranium sources for the present and impending market.
With market volatility setting to increase once again, it’s more important than ever that investors interest in uranium keep an eye on market happenings. The tide is already in favor of the crucial energy metal, and either renewed COVID-19 shutdowns or long-term market forces have the potential to turn that tide into a tsunami.
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FULL DISCLOSURE: Fission Uranium Corp. is a client of Stockhouse Publishing.