Uranium Overview

The European Commission has proposed plans to label nuclear power as green on 2 Jan 2022. This may be the start of a reversal in Uranium demand.

Uranium prices have jumped this week as violent protests in Kazakhstan stoke concerns about the security of supply for the radioactive material. Initially, we thought it's just a supply shock But when we dig deeper, we realize the prices of Uranium may have more legs to run.

Uranium, the chemical symbol U, is a radioactive chemical element that is essential in producing nuclear fuel. It is silvery-white in color when in its natural form. The demand for nuclear power as well as the global supply of uranium often affects the price of the commodity. Its price is often inversely affected by changes in the demand for fossil fuels.

The prices of Uranium have fallen since 2011, the year where Japan experienced its Tsunami and nuclear power plant disaster. Since then, more and more nuclear power plants are being turned off and the demand for Uranium has decreased.

However, things had changed recently. Due to the rising fossil fuel price and overreliance on Russia’s natural gas, the European Commission has proposed plans to label nuclear power as green on 2 Jan 2022. This may be the start of a reversal in Uranium demand.

Here’s an overview of this industry

Demand

As of December 2020, about 10% of the world's electricity is generated from uranium in nuclear reactors. This amounts to over 2500 TWh each year. It comes from over 440 nuclear reactors with a total output capacity of about 390,000 megawatts (MWe) operating in 30 countries. About 50 more reactors are under construction and over 100 are planned.

Belgium, Bulgaria, Czech Republic, Finland, France, Hungary, Slovakia, Slovenia, Sweden, Switzerland, and Ukraine all get 30% or more of their electricity from nuclear reactors. The USA has just under 100 reactors operating, supplying 20% of its electricity. France gets over 70% of its electricity from uranium.

Over the last 60 years, the world has enjoyed the benefits of cleanly-generated electricity from nuclear power, there have been over 17,000 reactor-years of operational experience.

With the higher carbon credit cost and low reliability on renewable energy such as solar and wind, the resurgence of nuclear power is inevitable.

Supply

As of December 2020, over two-thirds of the world's production of uranium from mines is from Kazakhstan, Canada, and Australia. Kazakhstan produces the largest share of uranium (42% of world supply), followed by Canada (13%) and Australia (12%).

Top Uranium Producing Countries

Reserves of Uranium in each country

Top Uranium Producing Mine

Top Uranium Producing Companies

If you would like to invest in Uranium, you could invest in Sprott Physical Uranium Trust, an ETF listed on Toronto Stock Exchange (TSX).

If you would like to invest in Uranium producing companies, you could invest in Cameco Corp (CCJ). It's listed on NYSE. Cameco Corp is the stock where institutional investors gain proxy for Uranium prices.

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