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Nuclear energy is regaining popularity and will likely help uranium prices rebound further in 2023. Several of the world's most developed countries have announced plans to extend the life of their existing nuclear power plants, with some even expanding their fleets rather than shutting them down as was previously planned.
The result has accelerated the uranium market's robust recovery over the last two years, after nearly a decade of low prices. This has included announcements of new construction and additional incentives and funding from Japan, France, South Korea, India, the UK, the US and most recently Germany, which has always had a love-hate relationship with nuclear energy.
For the last four decades, Germany has always maintained a love-hate relationship with nuclear power. Right now, Germany only has three existing nuclear reactors that produce 6% of the country's power supply, a fraction of the 1990s when there were 19 nuclear power plants that produced about a third of its electricity supply.
However, like many other European nations, Russia’s war is forcing Deutschland to rethink its energy security.
Germany and Russia were significant energy partners up until last year, with the latter supplying the majority of the nation's oil and natural gas. But as winter approaches, Europe and Germany are searching for substitute supplies as a result of the conflict in Russia.
The public is now supporting Germany's decision to reconsider its nuclear phaseout plan. In an August 2022 poll, 41% support extending the operation of German reactors by a few months, while another 41% support the use of nuclear energy in the long term.
Japan decided on a new nuclear policy in December. This policy will restart the country's nuclear fleet, extend the life of old reactors beyond the current 60-year limit, and build new reactors.
Also in December, the Indian government approved five new nuclear plants and announced funding for ten more. This is part of India's plan to build three times as many reactors in the next ten years.
Western governments are also paying more attention to energy security following the December invasion of Ukraine.
However, after so many years in a slump in which mines were closed and most undeveloped projects struggled to move forward, uranium production is confronted with declining reserves and grades.
With uranium commentators estimating that the required incentive price for new supply is more than $90 per pound - a roughly 80% increase over current prices - an exceptional tightening of the already thin uranium market could occur as early as 2025.
Even though there are no official sanctions against Russian uranium, the fact that the country has 27% and 39% of the world's capacity for conversion and enrichment caused prices for conversion and enrichment services to more than double in 2022. According to experts, this upward price pressure could trickle down to the spot price of uranium in 2023 and beyond.
According to a new report from The Oregon Group, this uranium bull market, which is the third one since 1968, could continue for much longer.
The Oregon Group is a go-to resource in the world of finance. This investment firm was founded by independent capital markets professionals Anthony Milewski and Justin Cochrane.
Milewski has worked in the mining industry in various capacities, including consultant, founder, and investor.
The Oregon Group Forecasts a 10-year Uranium Bull Market
Milewski and The Oregon Group believe that the number of uranium-fueled nuclear reactors will increase in the future.
The report, which is titled "The Start of the Uranium Bull Market and the Coming of the Second Atomic Age," explains some of the most critical factors that have contributed to this increase, particularly energy security, decarbonization and the commercialization of compact modular reactor technology.
According to an analysis of the uranium market, there has been a significant decrease in global inventories. Plus, new production is expected for a while, meaning there is a serious possibility of a shortage.
Some key sections of the report include
The uranium market has recovered from a decade-long decline. Mining operations will be restarted as the price of uranium rises but because reserves and grades at existing producers are declining, and more advanced development projects are required, supply will only be able to keep up with demand sometime soon. The producers argue that higher prices should be used to encourage new production.
The European Union has approved billions of euros in green nuclear energy subsidies. Nuclear reactors generate clean energy when powered by uranium, one of the most energy-dense fuels. Opinions about uranium and nuclear power have shifted worldwide for similar reasons. Many Japanese people are now calling for the restart of their nuclear reactors.
After 10 years of underinvestment, mergers, and warnings from industry leaders that new output requires high prices, the supply side is finally recovering. Uranium stocks have increased in value over the last few years.
This study provides a wealth of data about a dynamic industry and analyzes the major drivers that will continue to drive price growth in the near future. It includes a list of uranium stocks and ETFs to consider and an explanation of why you should invest in each.
This market may be in the early stages of a long-term bull market for uranium, meaning it’s a good idea for investors to keep an eye on it.
The Oregon Group's "The Start of the Uranium Bull Market and the Coming of the Second Atomic Age" report can be read in its entirety by clicking here.
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1) The author of the Article, or members of the author’s immediate household or family, do not own any securities of the companies set forth in this Article. The author determined which companies would be included in this article based on research and understanding of the sector.
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6) This document contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, (collectively, “forward-looking statements”), which reflect management's expectations regarding The Oregon Group.’s future growth, future business plans and opportunities, expected activities, and other statements about future events, results or performance. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to: (a) revenue generating potential with respect to The Oregon Group.’s industry; (b) market opportunity; (c) The Oregon Group’s business plans and strategies; (d) services that The Oregon Group intends to offer; (e) The Oregon Groups milestone projections and targets; (f) The Oregon Group’s expectations regarding receipt of approval for regulatory applications; (g) The Oregon Group’s intentions to expand into other jurisdictions including the timeline expectations relating to those expansion plans; and (h) The Oregon Group’s expectations with regarding its ability to deliver shareholder value. Forward-looking statements are not a guarantee of future performance and are based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this document including, without limitation, assumptions about: (a) the ability to raise any necessary additional capital on reasonable terms to execute The Oregon Group’s business plan; (b) that general business and economic conditions will not change in a material adverse manner; (c) The Oregon Group’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; (d) The Oregon Group’s ability to enter into contractual arrangements with additional Pharmacies; (e) the accuracy of budgeted costs and expenditures; (f) The Oregon Group’s ability to attract and retain skilled personnel; (g) political and regulatory stability; (h) the receipt of governmental, regulatory and third-party approvals, licenses and permits on favorable terms; (i) changes in applicable legislation; (j) stability in financial and capital markets; and (k) expectations regarding the level of disruption to as a result of CV-19. Such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of The Oregon Group to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: (a) The Oregon Group’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; (b) public health crises such as CV-19 may adversely impact The Oregon Group’s business; (c) the volatility of global capital markets; (d) political instability and changes to the regulations governing The Oregon Group’s business operations (e) The Oregon Group may be unable to implement its growth strategy; and (f) increased competition.
Except as required by law, The Oregon Group undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future event or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Neither does The Oregon Group nor any of its representatives make any representation or warranty, express or implied, as to the accuracy, sufficiency or completeness of the information in this document. Neither The Oregon Group nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this document by you or any of your representatives or for omissions from the information in this document.
7) Any graphs, tables or other information demonstrating the historical performance or current or historical attributes of The Oregon Group or any other entity contained in this document are intended only to illustrate historical performance or current or historical attributes of The Oregon Group or such entities and are not necessarily indicative of future performance of The Oregon Group or such entities.
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