- Large and mid cap miners lift as material sector rises 0.88%
- Uranium players surge as yellowcake spot prices lift to around decade highs
- WNA thinks demand for uranium for nuclear utilities could almost double by 2040
Fortescue Metals Group (ASX:FMG) shares surged 3.06% this morning with Rio Tinto (ASX:RIO), coal miners Whitehaven Coal (ASX:WHC), New Hope Corp (ASX:NHC) and Yancoal Australia (ASX:YAL) not far behind as well as rare earths monster Lynas (ASX:LYC) in a broad rally for the materials and energy sectors, up 0.88% and 0.57% respectively.
But the real gains are being made in a more obscure part of the market, with the strongest moves witnessed across the expanse of the ASX uranium sector.
What’s behind it all?
Uranium prices have moved to roughly decade highs, lifting around 5% after a steady run that has seen it be the only commodity on our Up, Up, Down, Down list to be a winner in every month since April.
According to price monitor Numerco, U3O8 – or yellowcake – is trading at US$62.25/lb.
That is the highest spot price in a decade aside from a fleeting moment, not longer than the Trinity test famously revisited in 2023 movie of the moment Oppenheimer, when the fallout Russia’s invasion of Ukraine sent uranium prices higher on supply concerns.
Those fears have lingered. Russia is a major supplier of enriched uranium and the US is keen to secure sources outside of that market for a uranium fleet seeing an increasing number of life extensions. Cameco’s CEO Tim Gitzel and CFO Grant Isaac have increasingly warned of a bifurcated market that could see two supply chains — Russian and ex-Russian – emerge.
But demand projections are also fuelling the nuclear interest in uranium stocks.
As detailed on this site today, the World Nuclear Association in its reference scenario, delivered in an updated Nuclear Fuel Report last week, said uranium demand from utilities would nearly double by 2040.
At the same time supply is expected to crater, leading experts to assume higher incentive prices will be required to bring more uranium to market, especially with uncertainties like a recent coup in Niger — supplier of 5% of global yellowcake production and around 24% of the uranium oxide exported to Europe.