Commodities: Uranium
The surge in oil prices over the past week should ultimately prove a tailwind for nuclear power, a stable, carbon-free energy source whose fuel costs are far less volatile than oil or natural gas. When fossil fuel prices spike, utilities and policymakers tend to seek alternatives that offer predictable and stable power costs, a profile that nuclear fits well. Once built, nuclear reactors can operate for decades with relatively low and stable fuel costs, making them an attractive option compared with oil or gas-fired generation during periods of energy market volatility.
PDN recently delivered a solid result discussed in detail Here. The uranium sector is not for the faint hearted but we are bullish and believe investors can adopt a buy the dip, trim the strength approach towards PDN.
Uranium didn’t enjoy the same “bid” as the other energy commodities last week but we believe it will with the events in the Middle East demonstrating how so many regions of the world are far too dependent on oil and gas. It’s a slow transition but we see the current events only increasing the tailwind for Uranium in the years ahead with the likes of Europe and Japan likely to lean even more heavily into nuclear power.
Hedge funds have shifted their short positions away from ASX resource names that benefited from the recent commodities boom, targeting consumer-facing stocks such as Treasury Wine Estates, Domino’s Pizza and Guzman y Gomez amid concerns around weakening household spending.
Uranium producer Paladin Energy (PDN) operates in Namibia and boasts a growth pipeline in Canada, offering clear leverage to strengthening global nuclear demand. It’s the last position in our Active Growth position whose report we need to cover, primarily as most things came in line, and the share price reaction was relatively small.
Uranium is treated as a strategic energy commodity, and geopolitical instability tends to amplify risk premiums even if the region isn’t a direct producer, hence its likely to firm this week. We believe the uranium price spike in January 2026 from US$85/lb to US$102/lb in just 3 days sent a strong message: the coming uranium super-cycle is likely to see extremely quick and outsized moves.
This ASX-traded ETF provides Australian investors with diversified exposure to leading global companies involved in the uranium industry, including mining, exploration and production, by tracking a uranium-focused index. It has enjoyed a strong albeit volatile year, which is arguably befitting of a nuclear-facing ETF. It’s advanced ~300% from its 2025 low but with two sharp ~25% corrections along the way.
X-Energy Reactor Co., an advanced nuclear company backed by Amazon has just received Federal approval to make uranium fuel for advanced reactors, the first new license in more than 50-years. X-Energy is part of a wave of companies developing the next-generation reactor technology as energy demand continues to appear poised to surge to satisfy the AI evolution. We aren’t seeing it locally but the rest of the world is looking to nuclear power to satisfy this burgeoning demand.
Uranium endured a sharp correction last week, taking related stocks down in its wake. However, in the bigger picture we believe the global fundamentals will ultimately drive prices higher – India is forecast to increase its nuclear power capacity ten-fold over the net 30 years creating a long term supply imbalance.
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