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Uranium has outperformed other metals markets this year, with prices up more than 20% YTD to above $60/lb for the first time since 2011, and stocks in the sector posting strong gains.
The demand for uranium in nuclear reactors is The World Nuclear Association is expected to rise 28% by 2030 and nearly double by 2040 as governments ramp up nuclear power capacity to meet zero-carbon targets, the World Nuclear Association said earlier this month in its biennial report.
Interest in nuclear energy has also increased since top producer Russia invaded Ukraine and many countries want alternatives to Russia’s energy supply, the report said.
Global uranium production fell by a quarter between 2016 and 2020 and recovered slightly last year to 49,355 tonnes, the report said.
The uranium market is very tight and prices are likely to rise heading into 2024, said Michael Alkin, Sachem Cove’s chief investment officer. The Wall Street Journaladding that he expects utilities to ramp up talks on uranium conversion and enrichment through requests for proposals or private negotiations in the fall.
Traders say utilities have rushed to win conversion contracts, driving up costs; Utilities are on track to sign contracts for more uranium in 2023 than in any year since 2012, according to Jefferies analysts.
“The market now needs new production again, but the lead times for that will not happen quickly or easily,” said Amir Adnani, CEO of Uranium Energy (UEC). WJ.
ETFs: (NYSEARCA: CAREER), (NYSEARCA: NLR), (NYSEARCA:XLU)
Have UEC shares 47% won in the past month; Other big winners in the sector include Ur-Energy (URG) +41.4%Fission uranium (OTCQX:FCUUF) +38.8%NexGen Energy (NXE) +29.3%Energy Fuels (UUUU) +29%Denison Mines (DNN) +18.8%Cameco (CCJ) +17.7%.