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(Kitco News) – According to some analysts, the uranium market is a freight train that has just left the station, as growing demand in a relatively tight market causes prices to rise.
The price of uranium is quite opaque; however, uranium futures on Nymex show the trading price at $ 44.15 a pound, a nine-year high. Weekly spot prices show uranium trading at $ 39 a pound, its highest level since March 2015.
According to some analysts, Sprott Inc.’s new company in the metal energy market is driving demand. In July, the precious metals company launched the Sprott Physical Uranium Trust (TSX: US $, U.UN C $), which allows investors direct access to the physical metal.
Since mid-August, the Trust has purchased 24 million pounds of uranium, which accounts for approximately 14% of global reactor consumption.
New market demand has attracted new market-driven players, including retail investors from Reddit’s WallStreetBets, a popular financial discussion forum.
In particular, investors are jumping on uranium miners, with Cameco Corp. one of Wall Street Bet’s most controversial companies on Monday. Cameco (NYSE: CCJ) last traded at $ 24.44 an ounce, up 83% from the beginning of the year.
In an interview with Kitco News, Warren Irwin, found at Rosseau Asset Management, said he is not surprised that investors are starting to pay attention to the uranium market.
“The prospects for uranium supply and demand looked fantastic before Sprott entered the market,” said Warren Irwin, who found Rosseau Asset Management.
Irwin is a long-term uranium bull that has growing demand and a shortage of supply in the market due to a decade of sad prices. He noted that it is difficult for the supply of new mines to come online with such low prices.
At the peak of the market in 2008, spot uranium prices were trading at $ 136 a pound. Some analysts are looking for uranium to go up to $ 60 a pound by the end of the year.
Irwin said that while it’s good to see a new boost to uranium, he doesn’t pay much attention to what retail investors say on social media. He explained that the fundamentals of the market support a long-term bullish market.
He added that uranium demand will continue to grow as global change towards green energy evolves.
“We don’t have a uranium-free green energy future,” he said. “I think some investors are starting to realize that.”
Sprott Inc. he also hopes the green energy transition will change the game of the uranium market.
“We believe uranium is entering a new bullish market as the world seeks a clean energy mix in the new green energy revolution,” Peter Grosskopf, CEO of Sprott Inc., said in an interview with Kitco News talking about the fund’s new trust. “If you want a low-carbon network, you can get it by spending a huge amount of money and having a highly inefficient network, which is inherently unstable, or include the core as a central part of the energy base. We believe that uranium has been undervalued for the past 15 years. ”
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor can the author guarantee this accuracy. This article is for informational purposes only. It is not a request to make any exchange of goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article does not accept guilt for loss and / or damage resulting from the use of this publication.