- According to Bloomberg, futures for a variety of uranium called “yellowcake” have reached their highest level in 15 years.
- Prices have peaked at $80 per pound and demand for nuclear energy is gaining momentum.
- Uranium production has hit recent hurdles, but investor interest remains high.
The renaissance of nuclear energy is increasing investor interest in uranium, contributing to raising the price of this key energy raw material to the highest level in 15 years.
Uranium futures tracking a form of uranium called “yellowcake” hit $80.25 a pound on Monday, according to Bloomberg reported.
Prices have been rising this year after a decade of sideways trading on rising demand for nuclear power. The increased demand comes as extreme weather events have made the electricity market more volatile and growing commitments to a clean energy transition have spurred the search for alternative energy sources.
The prospect of developing nuclear energy has once again directed investors towards shares of uranium mining companies and derivatives, and according to research cited by Bloomberg, they are much more interested in futures prices than in the spot price.
ABOUT two thirds of the world’s uranium it is mined in Kazakhstan, Canada and Australia. Uranium production has experienced some difficulties recently, with large Canadian mining company Cameco lowering its production targets due to challenges at its mining facilities. In addition, the recent coup d’état in Niger disrupted the supply of some cookies to Europe.
But the heavy metal mania did not subside. There are about 60 nuclear reactors under construction around the world, requiring about 30 million pounds of uranium a year before they become operational, according to a recent report by mining investment news magazine Crux Investor.
Hedge funds such as Terra Capital, Segra Capital and Argonaut Capital Partners are also joining in on this bet, pushing uranium stocks higher. In October, Bloomberg Intelligence reported that the price of uranium has increased by as much as 125% since the end of 2020, and the assets of uranium ETFs have increased twentyfold in the same period.