Uranium prices top $80 for the first time in 15 years as demand for nuclear power surges
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- Futures tracking a form of uranium called "yellowcake" hit a 15-year high, Bloomberg reported.
- Prices topped $80 a pound as demand for nuclear power gains momentum.
- Uranium production has recently run into hurdles, but investor interest remains solid.
A nuclear power renaissance is fueling investor interest in uranium, helping to drive the price of the key energy commodity to a 15-year high.
Uranium futures tracking a form of uranium called "yellowcake" hit $80.25 a pound on Monday, Bloomberg reported.
Prices have been on the rise this year after a decade of trading sideways, due to growing demand for nuclear power. The heightened demand arrives as extreme weather events have created a more unstable electricity market, and intensifying commitments towards the clean energy transition have spurred the search for alternative energy sources.
The prospect of a growing nuclear power industry has sent investors back into mining shares and uranium derivatives, and they're a lot more interested in futures prices than the spot price, according to research cited by Bloomberg.
About two thirds of the world's uranium is mined in Kazakhstan, Canada, and Australia. Recently, uranium production has run into a few hiccups, with a major Canadian mining company, Cameco, lowering its production targets due to challenges at its mining sites. Also, a recent coup in Niger disrupted some yellowcake shipments to Europe.
But the heavy metal mania has not subsided. There are roughly 60 nuclear reactors under construction globally and they need about 30 million pounds of uranium a year when they start operating, a recent report by mining investment news outlet Crux Investor said.
Hedge funds like Terra Capital, Segra Capital, and Argonaut Capital Partners are jumping in on the bet too, driving uranium stocks through the roof. In October, Bloomberg Intelligence said the price of uranium had risen by a whopping 125% since the end of 2020, and uranium ETF assets grew twenty-fold in the same timeframe.