Insights

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.