- Nuclear Energy Boom coming – ready or not!
- Global embrace of nuclear power
- US looking at massive reactor build
- Small Modular Reactors- planning for >1,000 new reactors by 2050
- Uranium semifinished product prices soaring
- Yellowcake prices still to catch up
- Kazakprom uranium output peaking
- Uzbekizstan uranium output peaking
- Where will the uranium come from?
KEY POINTS
NUCLEAR POWER DEMAND
- Global boom in electricity demand
- Emerging country demand growth continuing
- Data centres and AI adding much more
- IEA forecasts almost double nuclear power output by 2050
- Potentially 1,000 SMR units by 2050
- Existing generating plants achieving licence extensions
- Brownfields generators being reopened
URANIUM DEMAND
- Uranium in mine supply deficit since 2018
- Expectations of further 20 years deficits
- China, India, Russia and US new nuclear generating capacity coming
- Russian supply to US cutting off in 2027
- US tariffs on Canadian uranium creating confusion
PRIMARY URANIUM MINE PRODUCERS
- Largest global producer (~30%) Kazakhstan output has peaked
- #5 producer Uzbekistan heading lower
- NexGen 12ktpa project being developed in Canada
- African producers reopening
U3O8 MARKET PRICE ACTION
- Major rise from US$30/lb in 2018-2020 to US$105 still being digested
- Recent selloff was ~35% below early 2024 peak to US$68.70.
- Could have seen the reaction low but may test US$65 under the price gap
- Uranium enriched product prices and enrichment treatment charges still rising strongly
- Uranium producers share prices still below 2024 highs
URANIUM ETFS
- Uranium stock ETFs holding uptrends and testing downtrends
- Constructive technical positions but could see weakness before strength
NTH AMERICAN URANIUM MARKETS
- Concerns in Canada over Trump Administration import tariffs
- Confusion on impact and consequences
- Markets at key technical points
- Prices to go lower or higher?
ASX URANIUM PLAYERS
- Following the Nth American companies in share prices
- Boss Energy in production at Honeymoon Q2 2024 with full capacity of 2mlbpa
- 30% owned Alta Mesa in production in Q4 24 and heading for 1.5mlbpa by Q4 25
- Paladin Langer Heinrich has first production in Q1 2024 doing 3.5mlbpa
- Lotus reopening Kayelekera in Q1 2026 @ ~2mlbpa
- Deep Yellow to make FID decision in Mar 2025 for 3.6mlbpa Tumas Project in Namibia
- EL8 aiming for a Scoping Study on Namibian uranium resources
- Bannerman Etango under construction in Namibia for up to 6.7mlbpa from early 2027 startup
- Explorers active in Australia
- Be ready for resumption of bull market in ASX uranium stocks
Nuclear energy is having a renaissance.
Energy demand is so strong that all fuels and hydro will experience increasing demand over the next decade.
The US has pulled out of the Paris Agreement and is there with the other BIG three CO2 emitters China, India and Russia and out of the economic suicide that the EU, UK and Canada are intent on pursuing.
(Thank you Alan)
Australia is still there but we have an election coming up and chances are we won’t be there soon as well.
Economic and technical simpletons have been running Australia’s energy policy and it shows!
Peak Wind Power and Solar Power have been passed.
All the US$ trillions expended on white elephant offshore wind farms and regional solar acreages will prove to be uneconomic and unreliable.
The A$ billions committed by simpleton politicians, the bureaucracies and their donor backers have been done without building vigorous business cases and will surely end up being more NBNs.
Capex is too high and technologies soon to become obsolete.
It is times like these that it dawns on people that governments should not be in the business of business.
Simpletons with bright ideas spend vast amounts of taxpayers’ money unsuccessfully but leave taxpayers with debt and more taxes.
The Great Awakening is all about realising it is citizen’s money that is being wasted and future taxes will need to pay for it all.
The marketplace won’t be allowing it for much longer.
New processes will help solar into better and far more efficient technologies but they aren’t here yet.
China and India are still heading into more coal fired generation for the next decade.
China now consumes 650mtpa more coal than five years ago while the simpletons cut Australia’s annual consumption by 27m tonnes over the same period.
The world’s energy is >80% reliant on hydrocarbons and Australia as the second largest exporter of each of thermal coal and LNG is cutting back.
And of course it bans nuclear energy and frowns on being on being one of the largest exporters of yellow cake uranium oxide even though it has some of the world’s largest uranium deposits.
With Australia governments controlled by student-day activists at the representative and bureaucracy levels it will need a big shakeup to get these to change.
That big shakeup is coming.
`Progressive’ Big Tech in the US is now jumping on the Nuclear bandwagon after realising data centres and AI will need even more electric power.
Closed nuclear plants like Three Mile Island are being resuscitated.
In addition, in countries with relatively old nuclear fleets, the trend is for is licence extension.
Many plants built in the 20th century in the US were licenced to run for 40 years but are now being granted 20-year extensions, bringing the expected lifetime of many to 60 years.
Some reactors have seen their licenses extended to 80 years.
France and Spain have also recently extended licences of operating reactors beyond their 40-year initial lifetimes.
Uranium producers are now seeing utility demand being brought forward and see a bright future.
Forecasts for electricity production have optimistic case levels that could see nuclear power capacity more than double by 2050.
China, Russia and India will be the leaders of the next round of nuclear generating capacity.
How amazing that Australia, as the world’s 13th largest economy, has none and nothing planned.
The biggest issue for nuclear generating plants is the time taken to build them.
Green tape, black tape and red tape extend the planning and construction of one-off bespoke units and that really amounts to capitalised interest over a decade of construction by semi-skilled labour.
Location in sites of existing coal fuelled generators could cut that time and cost substantially.
But Small Modular Reactors actually offer something else.
Manufacturing by skilled workforces reduces the time line significantly.
Importantly, if a nuclear generating plant is floating it can be manufactured elsewhere and installed on or along a coastline.
This has already been done.
Many SMR technologies are being developed in a very wide range of sizes.
Current electricity generation capacity in nuclear plants is around 450 GW and The International Energy Agency has recorded potential for capacity equivalent to >25% of current levels to be brought on by 2050.
This is over 1,000 new SMRs.
New nuclear generating capacity needs additional uranium supply.
Global consumption is around 80,000 tonnes but US current uranium demand of 20,000tpa is likely to be 200% higher in the next 20 years and the growth equal to 50% of current total global requirements.
US nuclear power generates almost 20% of US total electricity but it is certain to rise.
Where will the Uranium come from?
As noted for other metals like silver and palladium with supply deficits being filled from inventories it is clear the position of uranium is the same.
Inventory rundown has been underway since 2018.
Projections suggest the supply deficit is long term chronic and will last another twenty years until the mid 2040s.
The market place is aware that nuclear and uranium supply chain investment in the coming years will require vast amounts of capital and important political decisions over extended periods.
Australia will be compelled to make those decisions as well. And soon.
The US currently produces next to no uranium but imports from Russia.
The US production lift will be coming soon.
Kazakhstan is the world’s largest producer of uranium, almost all from In-Situ Leach (ISL) operations.
At 21ktonnes it is three times that of #2 Canada.
Operational difficulties in Kazakhstan have forced Kazatomprom to commit to `Value over Volume’.
Output is on a clear path of decline.
Production risk here is substantial.
URANIUM PRICES
Uranium yellowcake prices rose sharply to US$65/lb with the Ukraine War in 2022 and then very strongly again in 2023-24 to >US$100/lb.
Yellowcake prices then weakened off in 2024.
The decline to US$68.70 was quite strange given the supply deficit structure but the futures market is thin and with large speculative holders of physical yellowcake around, this futures market can be fickle.
Note that the real market that includes converted UF6 has remained quite firm despite the weaker spot yellowcake price.
Does the gap between US$65 and US$68 need to be filled first?
22 year history. Source: John Quakes
Could fake out lower before moving higher.
Looks very positive.
The North American Market is important for uranium with the US the biggest uranium consumer at around 18kt with Canada # 6 at 4.5kt and Canada the #2 producer of yellowcake.
The Eric Sprott organisations are key players in gold and silver and also uranium with ETFs for uranium producers, uranium explorers and physical uranium.
These are carefully watched market trend indicators.
The Trump 25% Tariffs will hit Canadian miners selling into the US.
The impact is unclear at present.
We just have to heed the markets.
It appears to be in a major long term bull market.
Was the Oct 24 high just a backtest of the 2020 breakline?
Will it hold this uptrend?
The run up in Dec Qtr 2024 was a clear five Wave 1 so will it hold for Wave 2 here?
Could fall to US$33 without affecting long term bull.
This could weaken to C$18.
URA US$3.45bn
Sprott Producers US$1.50bn
Sprott Explorers US$0.26bn
Gold vs Uranium.
Breakout coming - but which way?
Major players in Uranium
Holds 1.3mlb physical uranium
Holds 2.8mlb physical uranium
Yet to generate royalty revenues
ASX Uranium Companies
This MPS Uranium Stock index broke down last year and is behavely similarly to the Sprott ETFs.
Is it being driven by the same Nth American investors given that the locals aren’t particularly interested?
All these ASX uranium companies have the same uptrend, same short term downtrend and similar horizontal support in their ten year price histories.
A resumed bull market is due.
Be ready to get aboard.
# gains from November lows
Interesting to see that agricultural commodities fell about 15% to make their lows in September while the USDX rose 4% and subsequently recouped all their losses while the USDX rose. Industrial commodities made their 6-12% lows in Oct and then rose with the USDX. Precious metals and oil made lows in November and sharp gains have been made since those lows.
The markets have had at least 44 months to play the bear side and now the world is fully convinced that war, plague and debt will continue to cut demand, China will slow down sharply and Europe will be in recession for ever. And of course that the silly mining industry will continue to increase supply.
But what if? What if the Dawes Points view that the US is doing very well as indicated by a strong stock market and GDP data and that positive attention might now be paid to commodities as demand is seen to no longer be falling?
Short cover rally anyone? Note the very positive action in the US equity markets this week.
What is a Short Cover Rally? Well, some traders have sold assets that they hope to buy lower and make a profit. If you are `short’ in futures or securities markets you have to buy them back or face unlimited losses. Other have sold and gone to cash. Others have just not bought so are underweight or underrepresented. To cover `shorts’, stock needs to be bought back. Underweight investors need to add to positions and then new money comes in. Can be explosive.
The 23% rally from the lows here is probably signalling a major change.
Also, gold in other currencies looks ready to continue the long term uptrend, especially in Yen.
Gold is now all about demand from India and China. This demand is unprecedented and will change the way gold is viewed. Much higher prices are coming.
Mining and Mining is down 50% or more. Ignored.
Small Resources. Irrelevant.
Gold. Clearly despised at just 1.5% of turnover!
Coal stocks in the US are looking to turn up after long declines.
Walter Energy
Consol Energy
Let’s hope this all happens.