KEY POINTS

  • Uranium reserves had depleted since 2011, when a nuclear catastrophe caused most nuclear reactors to shut down.
  • Although Japan has been significantly anti-nuclear recently, the country now wants to commit to nuclear energy once again entirely.
  • A resurgence in uranium prices might encourage frenzied buying of uranium-related stocks.

What’s going on with Uranium stocks

Uranium stocks have been lagging for a few weeks, but on Wednesday, uranium stocks rocketed. Shares soared by double digits following a news development that could signal significant changes in the uranium industry landscape.

Here’s how the top-performing uranium stocks ended the day on Wednesday:

This may be just the start of a new uranium bull run.

Why we care

On Wednesday, Fumio Kishida stated that Japan would take any possible measure to improve the current global power crisis and guarantee energy security for years. The most significant part of this plan consists of restarting nuclear energy production. Kishida intends to not only reactivate idled reactors but also construct next-generation ones. This is one of the most critical developments in the nuclear energy sector in nearly a decade. Furthermore, it has the potential to be a watershed moment for uranium mining.

Japan was the epicenter of a worldwide nuclear energy boom until a deadly tsunami at the Fukushima Daiichi nuclear power plant in March 2011 forced it to halt all of its 50 reactors. Because nuclear reactors require uranium fuel, this resulted in the shutdown of the global nuclear power sector and the uranium industry.

Since 2011, Japan has avoided nuclear power and relied on coal and natural gas imports to meet its energy demands. In 2021, nuclear power supplied about 7% of the country’s electricity.

Changing nuclear market

Nations across the world, however, are scrambling to become self-sufficient in a changing energy market disrupted by the geopolitical conflict between Russia and Ukraine. As a result, clean energy is at the forefront of everyone’s mind, and nuclear power is at the top of that list. According to data from the International Energy Agency, today’s clean energy leader is hydropower, followed by nuclear power.

According to a Bloomberg report from August 24, India intends to construct a massive nuclear reactor as it works towards a coal-to-clean-energy conversion.

Japan has ambitious plans to extend the lifespan of the 10 nuclear plants that restarted in 2011 and 17 others scheduled to resume next year. In addition, Japan is also planning on building new reactors.

The Japanese government’s approval of the new power source is a significant shift in energy policy. Japan’s nuclear energy sector may alone restore the golden days for uranium producers, as investors realize the enormous potential here. Uranium stocks have skyrocketed since Kishida’s remarks started making headlines, demonstrating a significant change in national energy policy.

What now

Last week, investors dumped uranium equities after Kazatomprom, the world’s largest producer, revealed intentions to raise production in 2024. Kazatomprom and other major global players, like Cameco, have made production cuts to help balance demand and supply and support uranium prices in recent years.

After uranium prices hit an 11-year high in March, investors were worried that a rise in production from Kazatomprom would drive down the market and costs again.

That may no longer be the case, as after uranium stocks rocketed yesterday, long-term prospects haven’t looked this good in years.

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