The uranium bull market is back.
After years of devastating blows, momentum has returned thanks to mine shutdowns, and support from the Trump Administration.
While most other commodity prices have taken a hit, uranium are picking up momentum.
Production was cut back at Kazatomprom, for example which annoucned it would reduce operations for about three months. Cameco halted production at Cigar Lake in Canada, as well.
“Prior to Kazatomprom’s announcement, we were forecasting a 30m pound deficit in [the] uranium supply/demand balance, which now looks as though it could be as much as 40m pounds,” said Alexander Pearce, analyst at BMO Capital Market, adding that the additional shortfall will “only accelerate” the depletion of inventories, as noted by Financial Times.
In addition, the Trump Administration outlined plans to revitalize the U.S. nuclear energy market. A report from the Nuclear Fuel Working Group (NFWG) argues that “measures to buoy the struggling companies will allow for a rebirth of nuclear power in the U.S. while disrupting China’s and Russia’s hold on the overseas market for reactors,” as quoted by The Hill.
With the NFWG report, there are several key support points for the industry.
- End DOE’s bartering of uranium and reevaluate DOE’s Excess Uranium Inventory Management Policy
- Create a level playing field for all energy sources in power markets and encourage FERC action to improve competition in the wholesale energy markets
- Streamline regulatory reform and land access for uranium extraction
- Support Department of Commerce efforts to extend the Russian Suspension Agreement to protect against future uranium dumping in the U.S. market
- Enable NRC to deny imports of nuclear fuel fabricated in Russia or China for national security purposes