For decades, nuclear energy has always been anchored to war heads and highly confidential military projects. This was a fact until late 90s when governments initiated the utilization of nuclear power for global clean energy generation. Nuclear energy is the second clean energy source together with hydro energy of which both contribute three quarters of global low carbon power generation aside of wind and solar.
Uranium is the key subject in nuclear energy generation. Simply, the heat generated from uranium atomic fission that takes place inside the reactor in a nuclear power plant heats water, steam is then used to spin turbines that generate electricity.
Source : Nuclear Power. Britannica
Uranium mining operation was managed by mergers & acquisitions where supply inconsistency, disruption & end of reserve for some mines pushed 80% of the mining industry to be managed by state owned companies. Additional primary causes of supply disruption are considering safety measures over market demand and, that 80% of the supplied uranium is by countries which rarely utilize it while 90% of uranium demand is initiated from countries with very few productions. Over two-thirds of the world's production of uranium from mines is from Kazakhstan (41%), Canada (8%) and Australia (13%).
Ten years ahead, the market is expected to grow. As stated by the World Nuclear Association, there would be a 27% increase in uranium demand over 2021-2030, and 38% increase for 2031-2040 given that by 2040, electricity demand is expected to increase by about 50% from that of 2019.
In 2020, mines supplied 74% of the utilities' annual requirements, there are about 440 nuclear reactors operating in 32 countries providing around 10% of the world’s electricity. Although the International Energy Association expressed its concern for the declining governments’ investments in 2019 reasoning this decline to safety concerns and high financing costs for reactors. The Organization of Economic Development-OECD stated that the installed nuclear capacity growth would reach 26% at 2050 including with 100 power nuclear reactors on order or planned. Most reactors currently planned are in Asia. In 2020, the below top 10 companies by production contributed over 85% of the world's uranium production.
Source: World Nuclear Organization
Here under are examples for companies’ stocks engaged in the exploitation of uranium in addition to Global X uranium ETF which includes 10+ uranium stocks .
CGN Power Co Ltd (1816.hk): Core business is the generation and selling nuclear power in the people’s republic of China. It is involved in the development & construction of offshore power stations.
Weekly chart: The stock has been in a down trend for six years since 2015, bottoming on March 23rd, 2020, at HKD1.5. The stock returned 60% within three months (July 2021-october 2021) recording a high of HKD 2.55. Currently the stock is trading at the 50% downward retracement levels at 2HKD. The uptrend would sustain if the stock trades above HKD1.90 heading towards resistance HKD2.20, HKD 2.55 followed by HKD2.75. The trend would reverse if prices trade below the 100 exponential moving average (EMA) at HKD1.95.
Uranium Energy Corporation ( UEC.N): is engaged in the exploitation of uranium and titanium concentrates in the United States, Canada, and Paraguay.
Monthly Chart: The stock bottomed in March 2020 at $0.3 followed by an 18-month uptrend till November 2021 at which the stock achieved 1,650% return reaching a high price $5.79. The 20EMA is an important support level of which the stock needs to maintain for the uptrend sustainability. Resistance levels are $5.80, $7.10 and $8.20. support levels are would be below $4, $3.5 and $3.
BHP Group Limited (BHP.N): BHP Group Limited operates as a resources company in Australia, Europe, China, Japan, India, South Korea, rest of Asia, North America, South America, and internationally. the company engages in the exploration, development, and production of oil and gas properties; and mining of copper, silver, zinc, molybdenum, uranium, gold, iron ore, and metallurgical and energy coal.
Monthly Chart: After March 2020 low at $29.78, the stock returned 171% within 13 months, (March 2020-May2021) reaching the highest price $81.82. Resistance levels are $80 and $93. Support levels are $60 and $55.
Global X uranium ETF (URA.ETF): The Global X Uranium ETF (URA) provides investors access to a broad range of companies involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries. https://www.globalxetfs.com/funds/ura/.
Weekly chart: The ETF recorded 83% within 3 months (August 2021 – November 2021), rebounding from a low of $17.2 to $31.60. The ETF gave up these returns on January 2022 after retracing almost 70% from November 2021 high. Currently the ETF is trading above the 20 EMA. Breaking the current resistance level $26.70 would promote the ETF to test $28, $32, $39 and 45$. Support levels are $24.70, $23.20, $22
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