URANIUM: Growing deficit to benefit miners2023 was a blockbuster...

URANIUM: Growing deficit to benefit miners

2023 was a blockbuster year for uranium and uranium miners as the spot price gained 88.54% to end the year at $91.09/lb.

The long-term fundamentals are bullish, and price momentum is likely to continue into 2024, say Wong and White.

Sentiment around nuclear energy — reliable baseload power to offset the intermittent nature of renewables – is bullish, with 22 countries pledging to triple nuclear capacity by 2050.

Add to this increasing geopolitical instability, and Western uranium miners may be the ultimate beneficiaries.

“In 2024 we expect utilities to continue to self-sanction and refrain from signing new contracts with Russian entities, perhaps accompanied by government legislation,” say Wong and White.

“The 2023 coup in Niger and Kazakhstan’s chronic inability to meet production guidance add to the uncertainty and underscore the importance of supply security.”

With uranium mine supply persistently below the needs of the world’s uranium reactors, the market has relied on secondary supplies.

“However, we believe that the era of inventory destocking, the primary source of secondary supplies, is over,” say Wong and White.

“We expect an industry shift from underfeeding to overfeeding will move enrichment processes from creating additional supplies of uranium to instead creating additional demand.

“The uranium market is forecast to face a growing supply-demand deficit that could ultimately benefit uranium and uranium miners.”

Source: Cameco. Data as of December 2023.