Advertisement

“No better bet than uranium”

Things are looking up for the price of uranium. In mid-2018, the spot price stood at $23 per pound, roughly the same as two years ago. Now it is up by around a quarter.

When it comes to commodities, "there is perhaps no better bet than uranium", Scott Melbye of uranium miner Uranium Energy told Barron's. And not before time. The metal, used in nuclear reactors, soared in the 2000s.

Between 2004 and 2007 the spot price quadrupled, reaching more than $140 per pound before falling back. A bear market ensued, which deepened when the Fukushima disaster struck in 2011. But now things are looking up. In mid-2018, the spot price stood at $23 per pound, roughly the same as two years ago. Now it is up by around a quarter.

Advertisement - Article continues below

One key source of demand, says Myra Saefong in Barron's, is emerging markets such as India, China (the biggest market for uranium), and Saudi Arabia. They are set to use more uranium as further economic growth requires more electricity. Last year, Saudi Arabia invited building proposals for its first two nuclear reactors; it is planning to develop up to 16.

Meanwhile, major producers have cut back amid the long bear market. This year global output is likely to slip below 135 million pounds in 2018 from a 2016 peak of 162 million.

No wonder, then, that more and more uranium plays are coming to market. A new uranium investment vehicle, Yellow Cake, began trading on Aim last summer; the world's largest uranium producer, Kazakhstan-based Kazatomprom, has also just floated in London.

Advertisement
Advertisement

Recommended

Visit/investments/commodities/industrial-metals/601598/the-best-bet-in-the-base-metals-rally
Industrial metals

The best bet in the base metals rally

The prices of key industrial metals have been enjoying a spectacular rally.
3 Jul 2020
Visit/investments/commodities/industrial-metals/601401/money-printing-infrastructure-base-metals-copper
Industrial metals

Governments’ money-printing mania bodes well for base metals

Money is being printed like there is no tomorrow. Much of it will be used to pay for infrastructure projects – and that will be good for metals, says …
27 May 2020
Visit/investments/commodities/601366/commodities-hitting-a-low
Commodities

Commodity prices are hitting new lows

Commodity prices are as cheap as they've ever been, but don't expect them to rebound as fast as they did after the global financial crisis.
22 May 2020
Visit/investments/funds/investment-trusts/601249/solid-income-from-a-renewable-energy-tortoise-fund
Investment trusts

Solid income from a renewable energy "tortoise" fund

GCP Infrastructure plods along compared with its rivals, but offers an attractive yield at the current price
4 May 2020

Most Popular

Visit/investments/property/601606/house-prices-crash-uk-property-prices-falling-where-next
Property

House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020
Visit/investments/stockmarkets/601611/nasdaq-all-time-high-markets-and-the-real-economy
Stockmarkets

How can markets hit new record highs when the economy is in such a mess?

Despite the world being in the midst of a global pandemic, America's Nasdaq stock index just hit an all-time high. And it's not the only index on a bu…
3 Jul 2020
Visit/economy/inflation/601584/the-end-of-the-bond-bull-market-and-the-return-of-inflation
Inflation

The end of the bond bull market and the return of inflation

Central bank stimulus, surging post-lockdown demand and the end of the 40-year bond bull market. It all points to inflation, says John Stepek. Here’s …
30 Jun 2020