how to invest in uranium

The field has been marked by booms and busts and its direction can change sharply on shifts in public policy and sentiment toward nuclear power, especially in the wake of disasters such as the 2011 Fukushima meltdown. The best uranium stock can vary depending on individual investment goals and risk tolerance. Long-term investors can buy uranium stocks through the process of share dealing. This involves paying the full value of the asset upfront to take on a ‘buy-and-hold’ approach. When share dealing, you take full ownership of the stock and cannot trade on both sides of the market.

how to invest in uranium

India plans to build a “mega-reactor” to drive its shift from coal to clean energy, while France plans to construct 14 starting in 2028. A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

Is nuclear power making a comeback as a reliable power source?

Use your online trading account or a free online stock screener to identify publicly traded uranium ore mining companies. You can invest in companies that primarily mine uranium, such as Mega Uranium Ltd. and Cameco Corporation, or a company like BHP Billiton Limited, which mines uranium in addition to other metals. You may want to investigate small-cap uranium ore mining companies. Global X Uranium is an ETF that tracks a range of companies involved in uranium mining and the production of nuclear components, giving exposure to the wider supply chain.

But it turns out that uranium with its current spot price at around $50 is still almost three times cheaper than it was at the peak of the 2007 bull market. Uranium Energy Corp (UEC) is a U.S. mining company with a set of government licences and permits to mine its deposits in the western and central U.S. Potentially, the company – as one of the few U.S. nuclear companies with a clean licence situation – could enjoy strong demand from the U.S. nuclear sector in the future. Cameco is also the sole fuel supplier to Bruce Power, which provides 30% of Ontario’s electricity through its nuclear power plant. Companies from the uranium sector and price of the commodity have strong upside potential and may attract more and more investors in the future. Looking at the historical chart of uranium prices, we can conclude that the commodity is in a cyclical boom and its price is rising exponentially in the face of favourable price drivers.

how to invest in uranium

This means that if the price of your stock drops due to factors mentioned above, such as company earnings reports or a natural disaster that has affected the supply of uranium, this may result in losses. An alternative way of investing is to take a position on a stock using derivative products, such as spread bets and CFDs. Following this disaster, Japan’s nuclear power production dropped from 30% to just 2%. All nuclear plants in the country were either closed down or operations were suspended, and other countries became wary of nuclear power generation also, cutting down on their own operations.

That would have been higher, but Cameco has been holding back production to take supply off the spot market. President Joe Biden’s administration supports nuclear energy to help reach net-zero carbon goals. “We are not going to be able to achieve our climate goals if nuclear power plants shut down. We have to find ways to keep them operating,” Energy Secretary Granholm recently told a House Appropriations subcommittee. Futures are an important part of the market as there is currently no exchange-listed, transparent price instrument that consumers and suppliers can use to manage prices and risks.

About 40% of Duke’s power, for instance, comes from nuclear energy. The price of uranium is likely to be influenced heavily by trends in nuclear power usage for electricity generation. The World Nuclear Association projects a 30% increase in electricity generation from nuclear power by 2030 and a 35% increase by 2035. Investing in uranium offers a distinct opportunity to diversify your portfolio and capitalize on the burgeoning clean energy movement. With various avenues for investment, including individual stocks, ETFs, futures and physical uranium trusts, you have multiple ways to engage with this unique market.

Camco is a Canadian producer and the second largest uranium company globally. UEC has already been mentioned, and it is likely that its stock price is going to go north as soon as it starts production. Uranium is a non-renewable resource that is mined in many countries. Kazakhstan, Canada and Australia are the major producers of uranium, while the United States is the biggest user of it.

Investing in uranium is possible through the purchase of shares of nuclear sector companies. Stocks like Kazatomprom (KAZ.UK) or Cameco (CCJ.US) are well known and also sometimes pay dividends. Physical uranium resources on land are sufficient for humanity for about 300 years at the current demand. Currently, there are a growing number of mining uranium projects because uranium deposits are important for the long-term energy future of our planet. This may have the potential to initiate a price rally of uranium on the spot market and the whole nuclear sector. Meanwhile, mining companies and mines did not stop mining, hoping for a short-lived revolt by Japan.

Cameco Corporation stock

The mill has a licensed capacity of over 8 million pounds of U3O8 per year. Aside from White Mesa, the company holds the Nichols Ranch ISR project in Wyoming. Nichols Ranch is currently on standby, and has a licensed capacity of 2 million pounds of U3O8 per year. Uranium and its mining have been in a bear market for 8 years, but with India and China at the forefront of building new nuclear power plants, demand for uranium increases. You can also get exposure to nuclear energy by owning shares of Exelon and Duke Energy, which run several nuclear power plants.

The political environment is changing for the better, but there is another force at work. There are now two funds that buy uranium (specifically, uranium oxide concentrate, known as yellow cake). You want to own some uranium in your portfolio; nuclear’s bill williams trader potential is enormous. But I’ve seen what happens with uranium stocks – fortune favours the patient. The uranium spot price went from around $7 per pound at the turn of the century all the way to $140 in 2006 – when it moves, it moves fast.

Exchange-traded funds that invest in baskets of uranium- and nuclear-related companies provide a convenient way to acquire a diversified uranium portfolio. As the world moves away from fossil fuels, there will be a greater dependency on nuclear power and renewable sources to meet the world’s energy demands. You should keep on top of market news to monitor the price of uranium and react appropriately to news events that may have an impact on your open positions.

Because of this, the price of uranium has halved since 2011 and is struggling to regain its peak. Since 2011, Japanese public opinion toward nuclear energy and expansion has soured. In 2021, nuclear power plants produced just 7% of the country’s energy supply. Hot on the heels of catastrophe, Japan shuttered all of its nuclear power plants. Following the fallout, many major nations follow along, shutting down reactors or rethinking their nuclear plans.

Where Can I Trade Uranium?

When the time is right, Arrived Homes sells the property so investors can cash in on the equity they’ve gained over time. Sign up for an account on Arrived Homes to browse available properties and add real estate to your portfolio today. In general, futures are highly speculative and are best suited for experienced investors. They offer the potential for high returns but come with significant risks, including the possibility of losing more than your initial investment.

In the first quarter of 2021, the North Shore Global Uranium Mining ETF saw returns of almost 42%. An effective way to diversify your portfolio can be through ETF trading​​. Exchange-traded funds track the performance of major global indices in order to provide investors exposure to companies that are involved in uranium production and nuclear generation. Learn about two significant ETFs that we offer on our platform in order to take advantage of this growing investment theme. Unfortunately, uranium also has a dark side, as the 2011 earthquake-tsunami-Fukushima reactor meltdown trio illustrated.

  • Uranium Royalty Corporation invests in uranium companies and produces dividends (UROY).
  • Uranium is a chemical element used as fuel in nuclear power plants.
  • Climate neutrality and clean energy dominate the development plans of both the European Union and the USA.
  • Despite all the current excitement, it’s not as though there is a sudden rush to build more nuclear reactors (or if there is, I’ve missed it).

We’ll get to more detail on those names and a few others later in this column. But first, here are the three big-picture trends that will drive uranium prices higher, with lots of volatility, of course, since that is typical with commodities. The European and even largest global nuclear company is Electricité de France SA EDF. It is currently building four new nuclear reactors in France and in the United Kingdom. “Due to its large footprint in those two countries, it is well positioned to benefit from their high nuclear ambitions in coming decades,” explains Tancrede Fulop, senior equity analyst at Morningstar.

President Trump rejects proposal to prioritise US uranium

Upon expiry, all these contracts are settled so that direct trading in the futures market typically requires considerable experience combined with solid liquidity. Canadian producers also welcomed the news, as it is the biggest supplier of uranium to the US. Cameco, which makes about 25% of its revenue from US customers, said its supply of uranium south of the border ‘has never been a threat to US national security’. Forex and CFDs are leveraged products and can result in losses that exceed your deposits. This brokerage is not authorized by the Comissão de Valores Mobiliários (CVM) or the Brazilian Central Bank (BCB).

Uranium’s radioactive properties allow it to produce massive amounts of emissions-free energy at greater reliability than wind and solar. Huge cuts to global uranium production have come from Kazakhstan, the world’s largest uranium-producing country. Responsible for 41 percent of global uranium production, the Central Asian nation began reducing its annual production levels in 2018 and plans to continue “flexing down” its uranium output through 2022. The launch of the Sprott Physical Uranium Trust and ongoing concerns over future supply shortages pushed the uranium spot price across the US$50 threshold in September 2021. Prices were soon see-sawing between US$38 and US$48 in October and November, but the start of 2022 brought civil unrest in Kazakhstan, as well as Russia’s invasion of Ukraine.

With governments increasingly focusing on sustainable energy, demand for uranium is poised to grow, making it an intriguing option for investors looking to diversify their portfolios. It’s a key source of fuel for nuclear reactors, which are part of the solution to the world’s growing energy needs. However, mining companies come with unique risks, including moral, political, environmental and social responsibility concerns.

Kazatomprom’s output in 2018 was 20% lower than 2017 as it tried to support prices and has said it will maintain that level until at least 2020. By 2060, China plans to increase nuclear energy production by 382%. This means that almost 200 new nuclear reactors would have to be built. India and Korea are also interested in evolving their nuclear energy.

The content of this page should not be characterized as an investment offer in Brazil or for investors residing in that country. These products are not suitable for all clients, therefore please ensure you fully understand the risks and seek independent advice. According to information from Kazatomprom’s homepage, the fund is expected to raise $500 million to purchase physical uranium from institutional and private parties. The $500 million raised will fund further purchases of physical uranium supplies. This portfolio is considered to be one of the most prospective known uranium areas given the mineralization discovered to date in the southwest along the Patterson corridor where the Arrow deposit is located.

The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest. The value of a CFD is the difference between the price of the shares at the time of purchase and their current price. Factors such as company management and the overall stock market can affect these trades. There are many publicly traded companies that mine, process and sell uranium. Futures are a derivative instrument through which traders make leveraged bets on commodity prices.

Private Companies

For investors who want exposure to the uranium market, but crave the diversity of a basket of equities instead of single stocks, exchange-traded funds (ETFs) are generally the way to go. The selection of uranium-focused ETFs isn’t very wide, but luckily for investors the options are growing. Understanding where these companies’ uranium mines and production facilities are located can help investors make informed decisions. Those interested in uranium stocks may want to look at the countries that produce the most of the metal.