Europe could be heading for a “nuclear renaissance”, says Pierre Georges of S&P Global Ratings. With gas and power prices rocketing in the wake of Russia’s invasion of Ukraine, the appeal of atomic energy is only growing. Unlike other “lowcarbon alternatives”, such as wind and solar, nuclear provides “a stable, non-intermittent supply of power”.
The UK has announced plans to build up to eight reactors as part of its new energy strategy. France is also planning more reactors, while Belgium has shelved plans to phase out its nuclear plants in response to “a chaotic geopolitical environment”. The Netherlands, the Czech Republic, Poland, Estonia, Slovenia and Serbia also have new capacity in the pipeline, says Michael Brush on MarketWatch. Further afield, so do China and India.
Uranium is back in fashion
Uranium futures have soared by more than a third since the invasion, with shares in miners such as Canada’s Cameco rising a similar amount, says Jinjoo Lee in The Wall Street Journal. Shares in UK-listed uranium trader Yellow Cake are up 46% since 24 February. At $63 a pound, prices for the nuclear fuel are at their highest since 2011. That was the year when the Fukushima disaster prompted a global turn against nuclear energy, with Germany initiating a phase out of its nuclear power plants. Uranium prices slumped, falling as low as $18 in late 2016. The latest price rally has been driven by fears that supplies from Russia may be disrupted.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The enrichment bottleneck
Russia only accounts for about 6% of uranium-ore supply, behind Kazakhstan (40%), Canada (13%) and Australia (8%). However, the “major bottleneck” is not in the supply of uranium ore, but in the “conversion and enrichment processes” that turn the ore into usable fuel, says Justine Calma for The Verge.
Uranium ore must first be “refined” into yellowcake, a substance that resembles “yellow chalk” before undergoing “conversion” into a gas. Then it must be “enriched” to a level where it can be used as fuel rods in a reactor. This is a complex process and Russia has “43% of the global enrichment capacity”, followed by Europe (33%), China (16%) and the US (7%), say Alex Gilbert and Morgan Bazilian for The Conversation.
The result is that up to one-fifth of the annual US uranium supply is “at least partially sourced from Russia”. Kazakhstan may mine more ore, but much of that output “travels through Russia before it is exported to global markets”. Fuels are also “highly specialised and tied to specific reactor designs”. That makes it harder to shift nuclear suppliers at short notice. If sanctions or counter-sanctions on Russia cut the supply of enriched uranium, then “plants in the US and Europe could be affected within 18 to 24 months”.
-
Why Chinese stocks are so far out of favourThere’s little appetite for Chinese stocks despite low valuations.
-
The 62 UK areas where you could be priced out of using your Lifetime ISASaving for your first home in Croydon, Ealing, Brent or any one of these other locations? You could be at risk of being priced out of using your Lifetime ISA
-
Why Chinese stocks are so far out of favour
There’s little appetite for Chinese stocks despite low valuations.
-
Three companies that dominate their markets with critical productsA professional investor tells us where he’d put his money. This week: Charlie Huggins, manager of Wealth Club’s Quality Shares Portfolio, picks three stocks.
-
Should you continue to hold Smithson Investment Trust?Opinion Smithson Investment Trust, a small- and mid-cap fund, has struggled to live up to lofty expectations, says Rupert Hargreaves.
-
Primark owner Associated British Foods is an overlooked gem going cheap — should you buy shares?Associated British Foods, the owner of Primark, is a family-owned business, which means it is passed over by the increasingly popular passive investment funds. That spells opportunity for private investors, says Jamie Ward.
-
Trump's tariffs and a shrinking market for alcohol deal double blow to DiageoDonald Trump's tariffs are a further headache for drinks giant Diageo, which is already being buffeted by a decline in alcohol consumption.
-
Three stocks in recruitment companies with promising recovery playsRecruitment agency Robert Walters and its peers are struggling, but now's the time to buy, says Rupert Hargreaves
-
Four UK data companies to buy nowCompanies that create, harness or turn data into a valuable offering could be sitting on a hugely profitable gold mine. Rupert Hargreaves picks four of the best UK data companies to buy now.
-
What’s the outlook for the shipping industry in 2025?All we know for certain about the year ahead is that it will be volatile. But the container shipping sector thrives on choppy waters
