Uranium is officially in a bull market, according to analysts, following a 20% price rise in 2023, exceeding US$66 per pound for the first time since January 2011, which was two months before the Fukushima nuclear accident.
In a recent note, PI Financial analysts highlighted the World Nuclear Association’s (WNA) biennial report predicts world reactor uranium requirements to surge to almost 130,000 tonnes, or about 285 million pounds, in 2040 up from an estimate of 65,650 tonnes in 2023, representing a 98% increase.
"Most of the new generating capacity will come from China – the country has 23 reactors under construction, 23 planned and a further 168 proposed to add to its current operating fleet of 53 reactors," the analysts wrote.
They added that 436 reactors are currently in operation globally and another 59 are under construction.
The top ideas in the uranium space from analysts at PI Financial are Ur-Energy Inc. (NYSE:URG, TSX:URE), which they believe offers the "greatest torque" to the uranium price and now ranks as North America's second commercial uranium producer behind Cameco Corporation (TSX:CCO).
They also like Nexgen Energy Ltd (TSX-V:NXE), which has "advanced permitting/ licensing/social acceptance and is now positioned to commence development at Arrow, the world’s largest, highest grade undeveloped uranium deposit."
Shares of Ur-Energy and NexGen Energy have gained 32% and 41%, respectively, year to date.
Contact Sean at sean@proactiveinvestors.com