2024-07-08 01:31:19
Analysts at Alpine Macro and BCA Research are optimistic about the future, with Alpine describing it as entering a long period of rising prices.
The company pointed to renewed global interest in nuclear energy. They highlighted the difficulties faced by the industry after the Fukushima incident, including several nuclear reactor shutdowns and low uranium prices. However, they believe a combination of several factors is pushing uranium into a growth period.
Firstly, they highlight the growing need for clean energy that can provide a continuous supply. Nuclear power’s ability to meet these needs, along with its small space requirements and superior safety record compared to fossil fuels, makes it an essential option to address global warming.
Secondly, Alpine notes that uranium production is not meeting the growing demand. After a period of reduced investment and mine closures, the industry is not producing enough uranium to meet needs.
The company says this shortfall is exacerbated by the significant growth in the number of nuclear reactors around the world, with China’s plan to build 150 new reactors by 2040 being a notable example. Demand for uranium is increasing due to the extension of the operating life of existing reactors, the reopening of previously closed facilities and the prospective development of small modular reactors.
Alpine Macro also notes a shift in public opinion, with an unprecedented level of support for nuclear energy in the United States. They highlight the inflexible demand for uranium – nuclear power providers prioritize maintaining adequate fuel supplies rather than reacting to short-term price changes.
As uranium prices are still far from their highest levels, Alpine Macro expects that the price rise is just beginning. They predict that uranium-related stocks have significant growth potential as the nuclear energy industry expands.
Meanwhile, analysts at BCA suggest that the upward trend in uranium prices is defying doubt, with the current supply and demand situation “much stronger than during the bull market of the 2000s.”
They even suggest that current conditions “may be the most favorable ever.” The BCA notes that the recent rise in uranium prices has been driven by demand and positive developments in the nuclear industry.
However, the research firm points out that the significant, largely overlooked gap between uranium supply and demand is the main driver of the upward price trend in the short to medium term.
“Additional uranium processing by enrichment companies and the start of a new multi-year contract phase by utility companies are driving up uranium prices,” says the BCA.
They conclude: “Looking at the story from any angle, the data and the overall story is very positive for uranium. The fall in uranium prices from the February peak of $107 should be seen as a temporary stabilization after the doubling of the uranium spot price. in six months.
In summary, BCA believes that the upward trend in the price of uranium is still ongoing and has the potential to continue to increase.
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