Since our last look at uranium stocks in late September, the futures price has risen by more than 8% to settle just under $49 a pound on Tuesday. The 52-week high is $50.85 and was posted on September 17. The commodity price of uranium had not reached that level since the summer of 2012, the year after the disaster at Fukushima.
Uranium prices began rising in mid-August thanks in part to the launch of an exchange-traded fund that proposed to hold most of its assets in physical uranium. The fund launched with a war chest of $300 million and later raised that total to $1.3 billion. Since its July 19 inception date, the price of uranium has increased by nearly 53%.
The Sprott Physical Uranium Trust Fund trades over-the-counter in the United States under the symbol SRUUF. So far the fund has accumulated more than 34 million pounds of uranium U3O8 (triuranium octoxide, a form of uranium that can be made into reactor fuel rods), the largest stash in the world, and 6 million more than just a few weeks ago. Sprott and others have been soaking up the surplus U3O8 that has been stacking up for the past decade
According to the World Nuclear Association, the amount of uranium needed to fuel existing power plants this year is 65,496 metric tons, or about 144.1 million pounds. Global production in 2020 totaled 56,287 metric tons, or 123.8 million pounds of U3O8. Now that prices are going up, mining activity is expected to pick up as well, but prices probably have to stabilize at around $60 a pound before many of the world’s inactive mines will consider restarting.
A second uranium fund launched by Kazakhstan, the world’s leading producer of uranium, and a United Arab Emirates investment company has built a war chest of $50 million to deal in physical uranium and has plans eventually to raise $500 million, according to a Wall Street Journal report. A third fund, London-based Yellow Cake PLC, is buying some 2 million pounds of uranium from Kazakhstan by the end of the year to raise its stockpile to around 16 million pounds.
The Wall Street Journal noted that the ups and downs of uranium prices “echo trading in stocks including AMC … and GameStop, which attracted ardent followings among individual day traders who gather on Reddit.”
In our story from late September, we also noted the similarities between at least one uranium stock and the other meme stocks. Here’s how those uranium stocks have performed over the past three weeks.
The Sprott Physical Uranium Trust Fund has added about 12% since September 28 to trade at $12.45 over the counter Wednesday morning. Since its inception, the shares have traded in a range of $7.50 to $15.10.
Cameco Corp. (NYSE: CCJ) posted a new 52-week high on Tuesday and now trades in a 52-week range of $9.01 to $27.42. The stock traded was slightly Wednesday to $26.50, which is up about 29% in three weeks. About 7.1 million shares of Cameco stock is traded daily.
Denison Mines Corp. (NYSEAMERICAN: DNN) posted a new 52-week high Wednesday and now has a range of $0.30 to $1.93 for the past year. Shares were up about 1.9% to $1.88 and have risen by more than 40% since late last month. The average daily trading volume on the shares is about 14.5 million.
Uranium Energy Corp. (NYSEAMERICAN: UEC) also posted a new high Wednesday and now has a 52-week range of $0.82 to $3.90. The shares are up by nearly 35% since late September, and the average daily trading volume is around 6.6 million shares.
Energy Fuels Inc. (NYSEAMERICAN: UUUU) has posted a new high Wednesday and now trades in a 52-week range of $1.42 to $8.73. The shares have added nearly 33% since late September and the average daily trading volume is 4.6 million.
NextGen Energy Ltd. (NYSEAMERICAN: NXE) posted a new 52-week high of $6.49 on Monday. The 52-week low is $1.62, and since late September, the stock has added more than 31%. The average daily trading volume is around 2.4 million shares.