The Uranium Bull is off

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Uranium prices have already gained 41.33% YTD. The spot price is now at $42.40 and has already cracked the $40 mark last week.

This is mainly due to Sprott’s new physical uranium trust which has built up to a net asset value of $1.08 billion in a short period of time. In addition, uranium producers are currently less willing to increase their bids and interrupt the current price upswing.

Industry insiders have been predicting for some time that uranium prices will have to rise in the long term. The majority of uranium producers need uranium prices of $60 to produce economically.

The uranium market is a dwarf compared to precious metals or the oil and gas market. With a market cap of just over $20 billion, it is a fraction of the multi-trillion-dollar oil and gas market.

But if the uranium bull is loose, the prices go up to the sky. In the last uranium bull market from 2003-2008, the uranium spot price rose from $10 to $136.

Source: https://www.cameco.com/invest/markets/uranium-price

The shares of uranium producers were able to start a small rally at the end of last year, but without the uranium price moving. YTD, shares of uranium producers have already made decent gains.

  • The share of the largest uranium producer JSC NAC Kazatomprom is already 126% up YTD.
  • The stock of Cameco (NYSE: CCJ) the largest producer in Canada has already gained more than 87% YTD.
  • Uranium Energy Corp. (NYSE: UEC) up 88.35% YTD.
  • Uranium Royalty Corp. (NASDAQ: UROY) up 30.42% YTD.
  • Denison Mines (NYSE: DNN) up 152.29% YTD.
  • Energy Fuels (NYSE: UUUU) up 65.61% YTD.
  • NexGen Energy Ltd. (NYSE: NXE) up 111.59% YTD.
  • Ur-Energy Inc. (NYSE: URG) up 128.12% YTD.

These are just a few examples of the performance of uranium-related equities. Should the price perform as it has in previous bull markets, we can expect to see much more from uranium-related equities as well.

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