Uranium stocks are ending the week on a strong note, with shares of Cameco (NYSE: CCJ) stock up 5.8% through 10 a.m. ET and smaller rivals Ur-Energy (NYSEMKT: URG), Uranium Royalty (NASDAQ: UROY), and Uranium Energy (NYSEMKT: UEC) doing even better — up 8.2%, 9.9%, and 12.7%, respectively.
And all four of these nuclear stocks have just one company to thank for their rallies: Kazakhstan’s Kazatomprom.
What Kazatomprom said today
As The Financial Times pointed out this morning, Kazatomprom (literally an abbreviation of “Kazakhstan atomic industry”) is the world’s largest producer of uranium for nuclear power. Problem is, it’s planning to become a smaller producer of uranium as early as next year.
Citing “project delays and sulphuric acid shortages,” Kazatomprom cut its uranium production target for 2025 by 17%, to a range of 25,000 to 26,500 metric tons. With Kazatomprom responsible for roughly 20% of world output, that means that global supplies of uranium — which were already constrained thanks to Russia’s war in Ukraine — will fall by another 3% to 4% next year.
Worse, FT cites a Canaccord Genuity analyst warning that Kazatomprom’s forecast could turn out to be optimistic. Canaccord estimates that Kazatomprom will produce closer to 23,000 tons of uranium next year, constricting global supplies even further.
Further, Canaccord observed that Kazatomprom has very few reserves to blunt the impact of a 2025 production cut. Rising demand for uranium has depleted the company’s reserves of uranium already mined and ready for shipment by 31% so far this year.
Should you buy uranium stocks?
Long story short: Kazatomprom can’t produce enough uranium to meet global nuclear power plant needs, so other uranium producers will need to increase their own production to fill the gap. The good news for investors is that this will mean higher prices for uranium and probably more profits for those who own shares in Cameco, Ur-Energy, Uranium Royalty, and Uranium Energy — at least for a time.
According to Trading Economics data, the spot price on uranium today sits just under $80 per…
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