The Biggest Commodity Bull Market to Consider

Uranium is back in bull market territory.

While most other commodity prices have taken a hit, uranium prices are picking up momentum.  All as mine shutdowns wiped out more than a third of annual global output, as demand has remained stable, says Bloomberg.  In fact, thanks to COVID-19, production was pulled back at Kazatomprom, for example, which said 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. 

Trump Administration officials also want to grant U.S. energy regulators the ability to block imports of nuclear fuel from Russia and China, adds Reuters.  All while creating a U.S. stockpile of uranium from domestic producers.

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