Insights

Big tech is turning to nuclear energy to fuel the massive power needs of AI-driven data centers. They're striking bold deals to develop small modular reactors (SMRs), sparking a surge in uranium demand and helping to support clean energy innovation. At the same time, global uranium supply remains inadequate to meet both current and future reactor requirements.

Demand for electricity over the next decade will put pressure on the U.S. power grid to keep pace. New investment in power-hungry industrial facilities is driving demand, especially the data centers that support artificial intelligence (AI), U.S. reshoring initiatives and the steady electrification of the transport sector.

The uranium market has faced short-term volatility, including price declines driven by geopolitical tensions and economic concerns. Despite these challenges, the long-term outlook remains strong. Supply uncertainties from key producers like Kazakhstan and Russia are contributing to this volatility, but the fundamental supply-demand imbalance suggests further growth potential.

Renewable energy is rapidly replacing fossil fuels as costs decrease and efficiencies improve with increased deployment, making it much cheaper than traditional energy sources. This shift, driven by the exponential growth of renewables, electrification, and efficiency, is expected to significantly alter global power dynamics as fossil fuels are phased out.

This might be an ideal moment to re-evaluate lithium miners given their potential to benefit as the global energy transition continues. The current dip in the price of lithium miners presents a potential short-term opportunity, given the strong future demand and supply imbalance. 

The uranium spot price has remained range-bound between $85 and $95 per pound, and ended the first half at $85.34 (June 30, 2024). Uranium miners fell in June, but bounced back in early July, outperforming the commodity YTD. 

The fourth industrial revolution (4IR) is driving unprecedented change. Its dominated by AI, robotics, IoT, genetic engineering and quantum computing. 4IR technologies need critical minerals, fueling a new commodity supercycle.

YTD the uranium spot price has stabilized between $85-$95 per pound after an 88.54% rise in 2023, indicating a healthy correction in a bullish cycle. Uranium miners' performance improved, matching spot price gains.

The copper market is entering a new supercycle. Demand is surging as countries invest in clean energy and protect their access to copper, while supply is constrained by a lack of new mine development.

The rise of AI and data centers will boost global electricity demand, challenging power grids but benefiting clean energy sources like nuclear. This trend will also increase demand for copper.

In March, the uranium market saw mixed results: spot prices fell, but miners' stocks rose due to a positive long-term outlook. We believe the uranium bull market has more room to grow.

The energy sector has experienced a remarkable transformation, primarily driven by the rapid growth and integration of renewable energy sources. Central to this transition is the advancement of battery storage technology.

Electricity demand is expected to grow 86% by 2050. At the center of this growth are uranium and copper – two critical materials that are in high demand and limited supply.

Uranium markets pulled back in February after a rapid rise—in our view, this is a healthy pause in the ongoing uranium bull market. News from Kazatomprom and Cameco reinforce uranium markets' structural supply deficit.

February was lackluster for critical materials, but the backdrop remains very positive. The global commitment to clean energy hit a new milestone in 2023 as investment surged to an unprecedented $1.77 trillion.

In the U.S. alone, copper is a crucial element in nearly 7 million miles of electrical wires. This white paper introduces the trends that are driving copper markets and copper miners, and explains our positive outlook. 

Uranium price surged 11% in January, fueled in part by Kazatomprom's cut in guidance for 2024 production. Junior uranium miners were top performers , climbing 18.78%. 

The era of renewable energy is emerging and beginning to reshape power generation. Recent trends suggest that this is a fundamental transformation powered by the fall in renewable energy costs. 

What forces are likely to drive energy transition materials and precious metals markets in 2024 and over the next decade? We discuss 10 critical macroeconomic and market-specific themes.

The U3O8 uranium spot price broke through $80 per pound, gaining 8.39% in November. COP28 was dubbed the "nuclear COP" in recognition of nuclear power's increasing importance. 

The long-term trajectory for EVs is positive despite the recent slowdown. Lithium-ion batteries (LIBs) are the preferred battery technology for EVs, thanks to their superior technical properties.

The uranium price increased in October, reaching a 12-year high at $74.48 per pound. A growing supply deficit is helping to support higher price levels as the West focuses on reshoring supply chains. 

As the U.S. advances in its pursuit of clean energy, it is strategically redirecting its energy security emphasis from oil to critical minerals, and diminish the influence of oil geopolitics and petrostates such as Russia.

Uranium's performance helped the energy transition complex close higher in September. From a macro outlook, solar panels are emerging as a critical player in the global energy transition. 

Uranium and uranium mining stocks posted their best month in two years, as the price of U3O8 reached a 12-year high. YTD as of 9/30/23, physical uranium has risen 51.88% and uranium mining equities have gained 23.93%.

Uranium and uranium mining stocks had a strong month in August. YTD as of 8/31/2023, spot uranium and uranium mining stocks have climbed 25.49% and 21.52%, respectively, outperforming the frothy S&P 500.

Uranium had a strong August, contrasting with the decline of most energy transition metals due to China's economic troubles. The investment capital spurred by the U.S. Inflation Reduction Act (IRA) is turning the U.S. into a cleantech powerhouse.

Uranium continued to outshine other commodities, with U3O8 surging 16.35% and uranium mining stocks up 9.11% YTD as of July 31, 2023. The growing embrace of nuclear energy is driving demand and sparking a resurgence in uranium mine operations. 

The U.S. power grid desperately needs modernization. This is driving the development of energy storage systems and V2G (vehicle-to-grid) technology and is a major copper demand driver. 

U3O8 has climbed a healthy 15.95% YTD, while most other commodities have lost ground. Greater focus on the uranium supply-demand gap helped boost uranium mining stocks as well.

Energy transition metals miners posted strong results in June, with uranium mining equities leading the group. The U.S. is entering the early stages of a manufacturing supercycle driven by massive energy transition investment.

The U3O8 uranium spot price has posted a healthy 12.99% year-to-date return as of May 31, and continued to show strength and diversification relative to other commodities.

Lithium and lithium miners staged a sharp rebound rally in May and were the positive exception among critical minerals. The sector was weighed down by China's faltering recovery, ongoing global growth concerns and the U.S. debt ceiling drama. 

The long-term secular growth outlook for energy transition materials got several boosts in April. Chile's decision to nationalize its lithium reserves reinforces the metal's role as a global strategic economic asset. 

The U3O8 uranium spot price climbed 6.01% in April, reacting positively to China's ambitious plans to expand its nuclear energy capacity. Global acceptance of nuclear energy has increased and positive momentum is building within the uranium industry.

As deglobalization accelerates, unfettered access to critical minerals is not likely to last. The old system of free and fair access to commodities, including critical minerals, is moving toward one marked by interregional competition, and unstable availability and pricing.

The U3O8 uranium spot price fell slightly in March. YTD through 3/31/2023, uranium has gained 4.93%, demonstrating resilience relative to other commodities.

As the global energy transition "arms race" heats up, the drive to secure supply is fast becoming more important than price. All signs indicate the 40-year bond bull market has likely ended and the next great secular bull market in commodities has begun.

Uranium miners made headlines with significantly sized uranium contracts that reflect higher demand for long-term supply commitments. Uranium market fundamentals are the most positive in over a decade and are likely to continue to be the primary performance driver.

We believe we are in the early stages of an energy transition materials secular bull market and favorable supply-demand dynamics are likely going forward. The upward revision in global growth, the timing effect of the China credit impulse and the surprise ending of China's zero-COVID policy have provided a tailwind for the metals market. 

Looking ahead, we believe the uranium bull market still has a long way to run. Over the long term, increased demand in the face of an uncertain uranium supply is likely to support a sustained bull market.

Three key themes for uranium markets in 2023: 1) increased emphasis on energy security worldwide; 2) higher conversion/enrichment prices may boost spot uranium prices; and 3) the global energy transition supports the case for nuclear power.

While the price of U3O8 uranium has lagged since May 2022, conversion and enriched uranium prices have significantly appreciated. We believe that current demand, coupled with a shift away from Russian suppliers, is likely to support a higher U3O8 uranium spot price.

The U3O8 uranium spot price climbed 8.32% in October. Our positive outlook is supported by the unprecedented number of announcements for nuclear power plant restarts, life extensions and new builds that are all creating demand for uranium.

September was tough on uranium, which was negatively impacted by the month's drawdowns. We believe the uranium bull market remains intact, especially given that many countries are facing energy shortages and rocketing costs.

Uranium, both physical uranium and mining equities, had standout performance in August, in contrast to the weak results posted by the broader markets. We believe uranium's gains reflect the growing acceptance of nuclear power among global governments as they seek alternatives to meet ambitious energy transition and security goals.