Uranium Week: Trump, Cameco & NextDC

Weekly Reports | Nov 12 2024

U308 spot price rebooted after the US election, while Cameco and commodities expert Bob Brackett offer positive views on nuclear energy and uranium.

-Uranium spot price drifts lower in a quiet week
-Cameco sees positive momentum for nuclear energy
-Petra Capital's tactical ASX uranium stocks to buy
-OddLots podcast speaks with Bob Brackett, commodities guru

By Danielle Ecuyer

US election stalls market activity

The uranium spot market was not immune to temporary US election paralysis last week. Industry consultants TradeTech explained activity in the spot market "stalled" until Thursday, Nov 7. Five transactions were conducted for 400,000 lbs of U308, including two transactions after market hours for purchases beyond the 90-day spot delivery window.

TradeTech notes the other three transactions included a purchase by the Sprott Physical Uranium Trust, a producer, and a trader, with spot prices ranging from US$76.50/lb to US$77.50/lb.

Friday last week saw a trade for January delivery between two trading entities at US$77/lb. This represented a decline in the TradeTech weekly spot price of -US$1.50, though unchanged from the previous day's spot price.

The consultants remind us the spot price remains up 5% year-on-year and 54% higher than two years ago, despite a retracement from a 16-year high of US$107/lb in February. TradeTech's Mid-Term U308 price indicator stood at US$84/lb, and the Long-Term U308 price indicator at US$82/lb.

Cameco reports Sept quarter results

Cameco announced September quarter results. CEO and President Tim Gitzel was quoted by TradeTech, stating, "there is a clear underlying trend of improving operational performance and cash flow generation, backed by stable and rising market prices."

"From a marketing perspective, we have contracts in both our uranium and fuel services segments with deliveries spanning more than a decade. In a market where we are seeing sustained, positive momentum for nuclear energy, we are continuing to be selective in committing our unencumbered, tier-one, in-ground uranium inventory and UF6 conversion capacity under long-term contracts, to capture greater upside for many years to come." 

ASX listed uranium stocks offer tactical upside

Petra Capital detailed the recent Global Uranium Conference, held in Adelaide in late October, noting record attendance of 225 attendees. The analyst points to a presentation from data centre developer and operator, NextDC ((NXT)), which emphasised the benefits of artificial intelligence for the nuclear industry.

Northamerican companies, including Cameco, Orano, NexGen Energy, and Energy Fuels, were also in attendance. The broker describes NextDC's presentation as "upbeat". While not directly discussing nuclear power, the focus was on AI benefits, stating, "by the way, this will require nuclear energy. I want green electrons. I want low-cost electrons. I need reliable electrons."

Petra believes this is a more positive message, potentially more resonant than traditional industry messaging.


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