Uranium Price Steadies as Sector Awaits Mine Restarts

After surging 34 percent in March and April, the U3O8 spot price slowed down in May, only adding 2 percent over the four week period.

Rapid value growth during the first months of 2020 has moved the energy fuel 37 percent higher from its January price of US$24.63 per pound. The upward momentum has excited market participants as the space has largely stagnated since the Fukushima nuclear disaster in 2011.

The current U3O8 spot price is US$33.50, a slight slip from the end of May’s US$33.93 value. Much of uranium’s rise has been attributed to production stoppages in response to COVID-19, but previous scalebacks in production from large miners have also helped move the U3O8 spot price along.

NFWG report provides sector momentum

Aside from those factors, the release of the US Nuclear Fuel Working Group’s (NFWG) report on uranium earlier this year has helped propel the uranium market forward somewhat.

The NFWG was born last summer out of a Section 232 investigation into uranium imports. The group’s report puts forth a concrete plan for the US to build a strategic uranium stockpile, to be funded with US$150 million worth of U3O8 annually for a decade.

America’s decision to build a surplus served to highlight the growing importance the energy fuel will play in the future. Presently, some 440 reactors supply 10 percent of global electricity supply.

This is the same number of operating reactors that were active before the Fukushima meltdown.

There are an additional 50 reactors being built, with plans for more reactors being discussed, as well as various models of small modular reactors.

The widespread progress of the nuclear sector — which boasts operations in 30 countries — is estimated to be valued at US$500 billion to US$740 billion over the next decade. Those are numbers that uranium expert Nick Hodge believes will help reshape the narrative around the sector.

Referencing the NFWG report and the growth of the nuclear market that it projects, he said, “(It’s) just going to raise the profile of the uranium and nuclear sector overall.”

Hodge continued, “You know, using (the NFWG report) as an infrastructure program and touting the benefits of it and allowing it to be embraced by environmentalists and politicians is going to be good overall for the sector, which is going to be good for investors, obviously, coming out of a bear market and really off the bottom.”

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