ASX Uranium Stocks: Get exposure to the sector
The evidence is that we are at the start of a major building cycle, containing the largest amount of nuclear reactor builds in decades, totalling 57 reactors worldwide. The world is embracing nuclear energy. Read why and which ASX uranium stocks stand to benefit.
Australian uranium stocks are bouncing back, having been hit hard in the past few months.
One of the themes we are seeing is the importance of positioning your ASX portfolio for the inevitable tipping point. When stocks are on sale, you need to be ready to pick some up, so you don't miss the best part of the investment returns to be made from ASX uranium stocks. Subscribe and start growing your wealth. Access our favourite ASX uranium stocks to buy now.
Key recommendations for Investing in ASX Uranium Stocks
The fundamentals for ASX uranium stocks are improving very quickly, but the uranium spot price remains shy of the key US$65-80 a pound, which should trigger a wave of activity.
Demand is climbing as the politics improves, but has not reached a tipping point where growing uranium production is triggered.
Those uranium mines that are in or nearing production have a clear advantage, which is being reflected in rising stock prices in the past few months, despite a relatively static uranium spot price.
These low cost, fast opening, companies are our targets. Find out our favourite ASX uranium stocks to buy now.
The clean energy uranium stock, Lotus Resources (ASX: LOT) has arguably more leverage to the uranium price than sector flagbearer and one of our Best Stocks to Buy Paladin Energy (PDN) because it can ramp up production quickly at low cost. You really do need to be in it to win it. Don't miss out on our full research on Lotus Resources, Paladin Energy Resources and all our top ASX Uranium stocks join now. We tell you which uranium stocks to buy and when.
We remain at a turning point for nuclear energy, which has gained valuable momentum in the past two years. Demand for energy resources is rising for carbon free clean energy as the realisation that wind and solar can’t do everything sets in.
Nuclear power ticks important boxes and the advanced stage uranium projects that are set to reopen are very well positioned. We believe that a small exposure to the sector is appropriate. Learn more about our Uranium stocks on the asx here.
URANIUM MARKET COMMENT
The Fukushima accident was over a decade ago and the uranium price has been steadily recovering. The acceleration to over US$60 in 2022, caused by heavy speculation of recovery, has dissipated, but not disappeared. The fundamentals in the clean energy sector are catching up as more countries embrace nuclear energy. Different countries are moving towards nuclear energy, but there is a great deal of politics involved. Sentiment is becoming more positive.
What we can say for certain, is that if there is to be more capacity, there needs to be a higher uranium price. The incentive price is at minimum US$65; maybe even US$80.
The existing uranium companies with projects that are reopening are in the box seat, such as Paladin’s Langer Heinrich mine in Namibia.
“GROUNDWORK IS BEING LAID FOR A URANIUM BOOM”
The long-term uranium spot price has remained stubbornly at around the US$50 a pound with continued low uranium prices. The US$50 a pound could be a floor for a number of important reasons.
Those reasons were summed up by Grant Isaac, CFO of the world’s largest listed uranium miner, Cameco. In our analysis in early February (Issue 534) we reported him saying that the “Groundwork is being laid for a uranium boom.”
Fast forward a couple of months and he is backing up this assertion with evidence that we are at the start of a major contracting cycle, containing the largest amount of nuclear reactor builds in decades, totaling 57 reactors worldwide. Under the Radar Report believes that it cannot be long before uranium prices resume their upward move, which will be positive motivation for asx listed uranium stocks - both uranium miners and developers.
US NUCLEAR POWER TO TRIPLE IN LESS THAN 20 YEARS
The US Department of Energy’s recent report “Pathways to Commercial Liftoff: Advanced Nuclear” provides concrete evidence of changing attitudes. The report advocates a rapid nuclear buildout plan to add more than 200 gigawatts (GW) of new nuclear power by 2050, more than triple current levels.
The modeling shows that the US will need between 550-700GW of additional clean, firm capacity to reach the net-zero carbon emission target. In addition to nuclear, other forms of clean firm capacity considered include renewables, paired with long duration energy storage, fossil fuels with carbon capture, and geothermal will be used to reach this target.
Advanced nuclear is the economic option, being a proven carbon free power, generating resources that can deliver at the scale required. This assumes expected capital cost reductions, for at least 200GW of this capacity.
Challenges facing renewable energy projects such as transmission availability and land use intensity are likely to make nuclear power plants even more attractive.
INCREASING POLITICAL SUPPORT IN EUROPE & ASIA
Late last month, the French parliament voted in favour of the Government’s nuclear investment plan, which includes the planned construction of six new nuclear reactors.
The Belgian Government has formally asked its national utility, Engie, to upgrade rather than close the Doel-4 and Tihange-3 reactors, which means that the country will now have to rebuild its uranium oxide inventories.
All Finnish political parties are supporting a proposed national nuclear program and in Turkey, the construction of a second nuclear power plant is about to start.
In Asia, key policy reversals are favouring nuclear energy. Both Japan and South Korea are repealing anti-nuclear legislation. A nuclear power plant is being considered in Indonesia, which would be its first.
CHINA IS EMBRACING NUCLEAR POWER
At the recent 20th National Congress in China, the People’s Political Consultative Conference reaffirmed the country’s nuclear plant buildout objective of achieving 150GW of installed nuclear capacity by 2030 and 380GW of capacity by 2050 through the approval of the construction of more than 10 nuclear plants a year for energy generation over the next decade.
China is reducing its carbon emissions and has demonstrated its ability to rapidly build nuclear power to schedule. A recent plant completed in China took just over seven years from first concrete to commercial operation.
Apparently, these rapid construction schedules are only matched by South Korea. China’s scheduled pipeline of new nuclear power capacity in 2021 was the size of the rest of the world combined. Even with new capacity in the rest of the world, China still dominates nuclear energy generation.
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