Uranium

Uranium recently emerged out of a multi-year bear market following oversupply and negative sentiment towards the energy material after the Fukushima disaster in 2011.

After grinding around low US$20/lb for a number of years, prices broke out with conviction, surging to US$50/lb in September, a fresh 9-year high.

Headlining the turnaround was Sprott Asset Management and its Canadian-listed Physical Uranium Trust. The fund, which launched in July, has been aggressively buying uranium off the spot market, putting it into storage and tightening supply. By October, the fund had amassed 30 million pounds.

By comparison, total spot volume for 2020 sat at just 92.2 million pounds. Another giant, that is the world’s largest uranium producer, Kazatomprom is on the verge of launching its own fund. Its fund will hold physical uranium as a long-term investment, with plans to raise up to US$500 million from institutional or private investors.

Alongside a flow of funds, nuclear energy is expected to play a pivotal role in the world’s transition towards net zero emissions. Major economies such as the UK have said nuclear will be “at the heart” of its decarbonisation strategy. Similarly, Japan has called out nuclear reactor restarts as “key” in achieving its green energy targets.