Commodities: Uranium
Uranium prices have staged a significant recovery from post-Fukushima lows of around US$18/lb in 2016 to the current trading range of US$65–95/lb. The rally was driven initially by production cuts from major suppliers, before accelerating with the launch of the Sprott Physical Uranium Trust in 2021, tightening supply. We’ve also seen renewed global support for nuclear energy and surging electricity demand from AI data centres, ultimately resulting in a 17-year high of US$106/lb in early 2024, before prices consolidated at the current level’s.
This ASX-traded ETF provides Australian investors with diversified exposure to leading global uranium stocks, including those on the ASX, with NexGen (4.5%) the largest ASX holding. Members must understand this is a volatile space and positions should be sized accordingly, although it’s nothing compared with the likes of Deep Yellow (ASX: DYL) and Boss Energy (ASX: BOE), who’ve both endured far steeper corrections in the last 12-months.
The Global X Uranium ETF (ATOM) provides diversified exposure to global uranium miners and nuclear energy companies, offering investors a thematic way to benefit from rising uranium demand and the growing role of nuclear power in the energy transition – a thematic MM is very bullish towards.
We own NexGen (ASX: NXG) and Silex in our Emerging Companies Portfolio both of which are exposed to nuclear power but this morning we’ve gone slightly off piste and looked at SLX, but note we are long and bullish both:
MM has made no secret of our bullish outlook towards uranium believing that nuclear power will be an integral part of the increasing energy demands from AI. Since the advent of Small modular reactors (SMRs) as the next-generation nuclear reactors which much smaller, cheaper and faster to build than traditional large-scale nuclear plants, nuclear is emerging as one of the few scalable, low-carbon baseload power sources capable of supporting the enormous and constant energy demands of next-generation AI infrastructure.
The Uranium ETF URNM has corrected over the last 1month, what is your view looking forward regarding this ETF and other ASX uranium stocks.
Hi Market Matters Team
Currently which Uranium stock do you prefer between Paladin and NexGen. I know you hold both but if you only held PDN would you switch to NXG? Also for further copper exposure would you buy CSC (Capstone)?
regards
Debbie
