Commodities: Uranium
Cameco (CCJ US) reported 1Q24 results early in the week that were a miss from a financial perspective, blaming its Kazakhstan operations which were facing a shortage of materials. That implies that the market is tight for product, and that was the catalyst to send Uranium prices higher, along with the Uranium stocks.
The Uranium sector seems to have gone into hibernation despite the obvious global supply/demand situation. What are your views on the near-term potential for ASX-listed uranium stocks?
Hi Team,
PDN seems to have disappeared from the main board?
MIN is a two-commodity play, with a combination of lithium and iron ore driving the miner (along with a mining services division). Both have been on the nose since early 2023, but we are now seeing signs of a bottom for both, although how far they can/will bounce is a tougher call.
PDN has trod a very similar path to CCJ, and although we aren’t bearish the miner, much of the good news for 2024 is already baked into the share price, making it look unlikely to forge significantly higher over the coming months – note another 20-30c dip will rapidly see us change our tune.
We wrote a piece on uranium in our Portfolio Positioning report on the 27th of March, with one of the key takeaways summing up our medium/long-term outlook on the sector:
Despite prices rallying strongly, signs continue to point to a multi-year tailwind for prices.
We’re bullish on Uranium over the medium term, and while we own Paladin (PDN) across two portfolios, we sold Cameco from the International Equities Portfolio in January at $US50.13 booking a solid 38% profit at the time, but we failed to buy the pullback on concern around the volume of pounds they had contracted at lower prices (forcing spot purchases) – we now think this concern is overblown.
Shaw and Partners hosted its 5th Uranium Conference on 26 March 2024. Presenters included: TradeTech, Sprott Physical Uranium Trust, WMC Energy, NexGen Energy, Peninsula Energy, Paladin Energy, Alligator Energy, Lotus Resources, Bannerman, Silex and Toro Energy.
We attended the annual Uranium conference hosted by Shaw & Partners yesterday, bringing in several industry experts as well as the management teams from many Uranium companies with assets around the world at different stages of development. Broadly speaking, there remain supply constraints in the market at a time when demand continues to gain momentum. Despite prices rallying strongly, signs continue to point to a multi-year tailwind for prices. We cover several of the key presenters in yesterday’s conference below.
