Uranium bull market continues as increased demand exceeds uncertain supply

by | Nov 23, 2022

The uranium bull market is set to continue as growth in demand outstrips uncertain supply of the metal with the spot price climbing 24.12%2 in the year to October 31st. This makes it one of the best-performing asset classes in 2022, data from HANetf’s Sprott Uranium Miners UCITS ETF (URNM) shows.

October was a strong month for the U3O8 uranium spot price which rose 8.32% while broader commodity markets gained just 1.67%3. Uranium mining stocks have lost -6.38%4 in the year to October 31st but still outperformed the S&P 500 which has fallen -17.72%. The Sprott Uranium Miners UCITS ETF (URNM), which HANetf launched in partnership with Sprott Asset Management, highlights that the International Energy Agency has increased its forecasts for nuclear energy generation growth to 84% by 2050 based on announced government targets worldwide. Generation could double by 105% based on the IEA net zero emissions scenario.5

Uranium stocks are seeing growing levels of activity – last month it was announced that Westinghouse, which provides nuclear operating plant services and designs and engineers new nuclear reactors, is being acquired by a joint venture of Cameco Corporation and Brookfield Renewable Partners.

Uranium Energy Corporation acquired a uranium development project from a subsidiary of Rio Tinto and Denison Mines Corp filed its environmental impact statement in a crucial step for the permitting process to develop its Wheeler River uranium mine.

Jacob White, Senior Analyst for the Sprott Uranium Miners UCITS ETF (URNM), comments: “We believe that strong demand for uranium conversion and enrichment, coupled with a shift away from Russian suppliers, supports a further increase in the U3O8 uranium spot price, which is ultimately supportive of uranium miners.

“Uranium demand will continue to gain momentum, as many countries are seeing record-high electricity prices going into high-demand seasons. Over the long term, increased demand in the face of an uncertain uranium supply may likely support a sustained bull market. For investors, uranium miners have historically exhibited low or moderate correlation to many major asset classes, potentially providing portfolio diversification.”

URNM, which tracks the North Shore Sprott Uranium Miners Index, was launched in May and provides investors with a way to access the growth of nuclear power through exposure to uranium miners. Alongside uranium mining equities, the ETF invests in physical uranium through investment trusts.

Sprott Asset Management are global experts in the uranium space, overseeing a US-listed sister uranium miners ETF with around $700 million AUM6 and a physical uranium trust with almost $3bn AUM

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