Uranium prices cakewalked to a 15-year high, serving investors a sweet slice of (yellow) profits. Uranium spent the last decade in the shadow of the Fukushima disaster, but growing demand for nuclear power has fueled a supply shortage in the key ingredient powering those reactors.

Nuclear renewal: Uranium prices fluctuate with shifts in global nuclear policy — and the embrace of older traditional nuclear reactors is pushing the world’s 440 nuclear plants to stay online for longer. With energy supply disruptions still top of mind and demand continuing to grow, countries are planning more reactors:

• Over the last 20 years, new reactors have mostly replaced older reactors, but Asian countries like China and India are leading a nuclear revolution by building 32 of the world’s 60 new reactors.
• There could be more where that came from — with over 110 planned reactors and over 300 more proposed projects globally, which could turn around decades of slumping nuclear production.

What’s fueling the fission?

On Monday, nearly 200 nations agreed to transition away from fossil fuels at the COP28 climate conference, but getting there won’t be easy. Nuclear will play some role in the effort, as 22 nations aim to triple their capacity by 2050. That’s been welcome news for uranium investors.

• This year, hedge fund managers have piled into uranium bets while ETFs tracking uranium miners like the Sprott Uranium Miners ETF (NYSEARCA:URNM) have soared over 50%.
• Terra Capital’s Matthew Langsford says, “The equities could see dramatic upside, 50%, 100%, possibly more” (BBG).

Forward-looking: By 2040, nuclear capacity is set to increase ~75%, while global uranium demand is projected to double per the World Nuclear Association. Cameco CFO Grant Isaac highlighted the need for new uranium supply and believes “the days of buying $40 uranium are over,” while Uranium Energy’s Executive VP Scott Melbye echoes sentiments that the uranium market is “dramatically undersupplied and the current bull run is “still in its earliest days.”