{"id":52833,"date":"2023-08-25T06:52:58","date_gmt":"2023-08-25T10:52:58","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/nuclear-power-could-see-its-biggest-expansion-in-decades-leading-to-increased-demand-for-uranium\/"},"modified":"2023-08-25T06:53:01","modified_gmt":"2023-08-25T10:53:01","slug":"nuclear-power-could-see-its-biggest-expansion-in-decades-leading-to-increased-demand-for-uranium","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=52833","title":{"rendered":"Nuclear power could see its biggest expansion in decades, leading to increased demand for\u00a0uranium"},"content":{"rendered":"

Interest in nuclear power is climbing and prices for uranium have reached their highest level in more than a year, providing an opportunity for investors looking to capitalize on bets that global worries surrounding climate change will boost demand for the energy source.<\/p>\n

\u201cThe nuclear power market is currently set up for significant growth given global interest in clean, stable energy supplies,\u201d said Jonathan Hinze, president at nuclear-fuel consultancy UxC.<\/p>\n

\n

\u201cIn my 20-plus years in this industry, this is perhaps the best set up for nuclear power expansion that I have ever seen,\u201d Hinze told MarketWatch. \u201cA confluence of drivers, including the need to reduce carbon emissions, as well as increasing focus on energy security are propelling nuclear power forward in most major markets across the globe.\u201d<\/p>\n

That\u2019s \u201cnaturally translating\u201d to rising demand for uranium, with 1% to 2% annual growth at a minimum anticipated over the next few decades, he said.<\/p>\n

<\/p>\n

<\/p>\n

<\/p>\n
<\/div>\n<\/figure><\/div>\n

The nuclear power industry has garnered renewed attention in the wake of the July release of the Oppenheimer movie, which tells the story of J. Robert Oppenheimer, among the creators of the atomic bomb. Uranium production, meanwhile, has declined from five years ago, contributing to a rise in prices to their highest in over a year.<\/p>\n

Read Living With Climate Change:<\/strong> Modern-day Oppenheimers see the future of nuclear energy \u2014 and it\u2019s mobile \u00a0\u00a0<\/p>\n

Weekly spot uranium prices stood at $58.25 a pound as of Aug. 21, the highest since April 2022, according to data from UxC. That\u2019s up around 22% year to date.<\/p>\n

Uranium supply<\/h2>\n

This year\u2019s rise in prices is due in part to a realization that investment in uranium supply lagged in the decade after Japan\u2019s Fukushima nuclear accident, said William Freebairn, associate editorial director, nuclear power\/uranium prices at S&P Global Commodity Insights. \u00a0<\/p>\n

On March 11, 2011, Japan suffered from its largest-ever recorded earthquake, and massive tsunamis created by the quake flooded the Fukushima Daiichi power plant \u2014 leading to the worst nuclear disaster in a quarter century.<\/p>\n

The disaster had \u201cprofound\u201d impacts on both uranium supply and demand through a \u201cdeep and prolonged bear market,\u201d said Scott Melbye, executive vice president at mining company Uranium Energy Corp.
\n UEC,
\n -1.18%<\/bg-quote>.<\/span>
\n The long period of low prices did not incentivize new uranium mine developments and the market is now \u201cheaded into this growth phase with a structural deficit in uranium supplies,\u201d said Melbye, who\u2019s also CEO of Uranium Royalty Corp.<\/p>\n

Total world uranium production was at 48,888 metric tons in 2022, up from the last couple of\u00a0 years but down from 60,514 metric tons in 2017, according to data from the World Nuclear Association. <\/p>\n

\u201cUranium output has been ticking along, with the slow rebound from historic curtailment due to oversupply of the market [and] COVID related issues ongoing,\u201d said Katherine Matthews, associate research analyst, metals and mining at S&P Global Commodity Insights.<\/p>\n

But Melbye pointed out that current uranium production lags global consumption by more than 50 million pounds per year. There\u2019s an \u201curgent need to bring new mines in a market that has provided little incentive to do so in recent years,\u201d he said.<\/p>\n

So while uranium prices have climbed to $58 a pound or more, that will only incentivize the world\u2019s most competitive mines, said Melbye. \u201cSignificantly higher prices will be required to justify large capital investments in new mine capacity.\u201d<\/p>\n

Demand for nuclear power<\/h2>\n

Global energy markets, meanwhile, have seen nuclear power in a new light when it comes to safety following Japan\u2019s nuclear disaster, particularly in the context of efforts to provide clean energy.<\/p>\n

Read archived story:<\/strong> Nuclear power proves its resilience a decade after Japan\u2019s Fukushima disaster<\/p>\n

The U.S. saw its first newly-constructed nuclear unit come into operation in more than 30 years at the end of July, and Georgia Power Co. expects to place another unit into service later this year or the first quarter of 2024. <\/p>\n

In the U.S. and Canada, new technologies, starting with small modular reactors, are being planned for in growing numbers, said S&P Global Commodity Insights\u2019 Freebairn. <\/p>\n

In Eastern Europe, many countries are turning away from Russia as a supplier for their nuclear industries, leading Poland to plan an \u201cambitious program of nuclear energy deployment,\u201d while other countries, such as the Czech Republic and Romania, look to expand existing nuclear power programs, he said.<\/p>\n

\u201cGrowing interest in nuclear energy is being seen around the world,\u201d said Freebairn, noting this his company has been highlighting events in Eastern Europe and North America.<\/p>\n

<\/p>\n

<\/p>\n

\n

\n \u201c<\/span> \u201cGrowing interest in nuclear energy is being seen around the world\u2026.\u201d\u201d<\/span>\n <\/p>\n


\n \u2014 William Freebairn, S&P Global Commodity Insights<\/span>
\n <\/small><\/p><\/div>\n<\/p><\/div>\n

For now, nuclear power provides around 10% of the world\u2019s electricity, according to the International Energy Agency.<\/p>\n

It comes from roughly 440 reactors in 31 countries with about 390 gigawatt electrical (GWe) capacity, according to UxC\u2019s Hinze. If total power demand grows by 2% to 3% as agencies like the IEA predicts over the next 10 to 20 years, and nuclear power keeps it share of the total in the 8% to 10% range, then Hinze expects nuclear power should reach at least 500 GWe by 2040 and as high as 550 GWe.<\/p>\n

That would represent a roughly 40% growth over the current market size, he said.<\/p>\n

There are potential downside risks to nuclear power growth, including competition from fossil fuels and renewables, but since nuclear power is \u201calready not a huge share of the market, it would make sense that its growth can continue regardless of how the other energy fuels fare,\u201d Hinze said.<\/p>\n

Stocks and investment<\/h2>\n

Against that backdrop, uranium exchange-traded funds and shares of uranium-related companies have climbed so far this year.<\/p>\n

The nuclear market has been \u201cholding its own despite some broader losses in the financial markets in recent months,\u201d said Hinze. \u201cWhile recession fears and other macroeconomic factors continue to weigh on the broader market, it seems like nuclear power and the companies in this sector have not been excessively harmed by these trends.\u201d<\/p>\n

Year to date as of Aug. 22, the Sprott Uranium Miners ETF
\n URNM
\n has climbed nearly 18%, while the Global X Uranium ETF
\n URA
\n has added almost 16%, FactSet data show. Uranium fuel provider Cameco Corp.
\n CCJ,
\n -0.64%<\/bg-quote>
\n is up nearly 60%.<\/p>\n

\u201cDespite these impressive recent gains, most are still trading well below historic highs,\u201d said Melbye. \u201cThis would indicate that we are still at a very early stage in the uranium market recovery.\u201d<\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Interest in nuclear power is climbing and prices for uranium have reached their highest level in more than a year, providing an opportunity for investors looking to capitalize on bets that global worries surrounding climate change will boost demand for the energy source. \u201cThe nuclear power market is currently set up for significant growth given […]<\/p>\n","protected":false},"author":1,"featured_media":52834,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-52833","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nNuclear power could see its biggest expansion in decades, leading to increased demand for\u00a0uranium | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Interest in nuclear power is climbing and prices for uranium have reached 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