While rumors evoke the will of France to build 6 new nuclear reactors, the share price of the uranium sector has jumped in recent days. Should this be seen as the continuity of a longer-term uptrend?
Yesterday’s day only confirmed the trend visible for several weeks: the uranium sector is booming. An increase yesterday which could be the result of the will of countries like France to continue to develop its nuclear fleet.
The commodity boom
Like many other raw materials before it, uranium seems to be benefiting from the almost general rise in prices since mid 2020. After a period of slack demand, the global recovery has been accompanied by a sharp rise in many countries. raw materials.
Thus, the ounce of gold peaked last August, flirting with the € 1,800 mark. The same goes for the price of palladium, at its highest last May and which is currently experiencing a new ascending phase after a strong correction. Other materials such as cereals, sugar, coffee and even natural gas have taken advantage of the economic recovery to see their prices appreciate.
France wishes to persist in nuclear power
The will of the executive seems to be turned towards continuity in nuclear power. In any case, this is the meaning of the statement made by President Emmanuel Macron last week. A statement in which he announced the investment of nearly one billion euros in the development of modular mini-reactors.
The newspaper Le Figaro goes even further in recent days by specifying that the president could announce the construction of 6 new nuclear reactors in France. An announcement that could take place before Christmas. For many observers, it is this news that has propelled the actions of many groups specializing in uranium in recent days.
A desire to persist in nuclear power which today seems to be guided by two parameters:
- The low carbon impact of the technology
- The capacity of power plants to produce energy continuously without being dependent on external elements. Like sunshine for solar power or wind for wind turbines
What Impact on the Sector and Uranium actions?
More than any other asset, commodities respond and adapt quickly to supply and demand. Thus, this news made it possible to propel a certain number of assets linked to uranium. There are many examples of increases. Let’s start by quoting the NorthShore Global Uranium Mining ETF, a stock exchange traded fund that presents a basket of shares of companies involved in mining, exploitation but also research and development in the uranium sector. On yesterday alone, this ETF saw its quotation rise by more than 5.5%.
The same goes for the Global X Uranium ETF, listed on the New York Stock Exchange. An ETF which saw its price gain 4.7% on yesterday’s session. And the progression does not date from yesterday. Since the start of the month, these two funds have posted price growth of over 20%.
When we know the low carbon impact of nuclear power and the sometimes displayed desire to prioritize the fight against CO2 emissions, uranium could have a bright future ahead of it. As evidenced by the 40% rise last month in uranium futures. An increase that largely responded to the increasingly clear desire to make the fight against CO2 emissions one of the ecological priorities. A priority that passes for many governments by nuclear energy.
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