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Uranium-related stocks post broad gains in Friday's trading as Kazatomprom, the world's largest producer of uranium, said global production will not adequately cover market demand this decade.
"In the current pricing environment another Kazatomprom-sized supply source will be needed to cover future market needs," Kazakhstan's state uranium company said.
ETFs: (NYSEARCA:URA), (NYSEARCA:NLR)
Among U.S.-listed uranium producers: NexGen Energy (NXE) +5%, Denison Mines (DNN) +3.9%, Uranium Royalty (UROY) +3.6%, Nuscale Power (SMR) +3.4%, Cameco (CCJ) +2.8%, Ur-Energy (URG) +2.7%, Energy Fuels (UUUU) +2.2%, Uranium Energy (UEC) -0.3%, Centrus Energy (LEU) -0.5%.
Uranium prices jumped to a 16-year high when it closed at $106.40/lb early last month, more than doubling from $43.05/lb at the start of last year.
As a result, Kazatomprom reported its 2023 net profit rose 23% Y/Y to 580.34B Kazakhstani tenge (~$1.27B) as revenues jumped 43% to KZT1.445T.
The company reiterated FY 2024 production guidance of 21K-22.5K metric tons, compared with 2023 output of 21,112 tons, citing scarcity in sulfuric acid used to leach uranium from underground deposits.
Uranium prices have moderated somewhat to ~$91/lb, but brokerage PGM Global remains bullish, saying "the global trend towards nuclear power suggests uranium is in a long-term bull market."
"The long-term pipeline for nuclear power is bright... as Western governments try to diversify their uranium purchases away from Russia and Kazakhstan, many companies are signing contracts at premium prices," PGM says.