While worries about a possible economic downturn have hurt most energy-related commodities, uranium is still glowing, as uranium spot prices have climbed ~18% so far this year, the Sprott Physical Uranium Trust (OTCPK:SRUUF) is up 8% and the Global X Uranium ETF (NYSEARCA:URA) has gained 6%.
Some industry analysts think uranium has room to run higher, according to The Wall Street Journal‘s Jinjoo Lee at “Heard On The Street”: BofA Global Research expects uranium spot prices will hit $75/lb by year-end 2025, while others see prices rising to ~$60 by then.
One clear sign of a tight market is the cost to enrich uranium, which surged from $60 per separative work unit before Russia’s invasion of Ukraine to ~$140 today, according to Jonathan Hinze, president of UxC, a nuclear fuel consultant.
Uranium demand has seen a boost as some countries are looking to extend the lives of existing nuclear power plants, and the U.S. Inflation Reduction Act created a tax credit for existing nuclear power plants, giving them an incentive to keep running.
On the supply side, BofA Securities forecasts a production deficit of 60M lbs of triuranium octoxide by 2035, roughly equivalent to the annual output of Kazakhstan, the world’s largest producer.
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