ASX uranium shares are booming this week. Here's why.

ASX uranium shares are in the hot seat this week amid renewed demand for the commodity.

share price rising

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

ASX uranium shares are surging across the board this week, as uranium spot prices lift to 6-year highs of US$34.25/lb.

The largest of the ASX uranium shares, Paladin Energy Ltd (ASX: PDN) has rallied 56% over the past week to an 8-year high of 78 cents.

Explorers including Deep Yellow Limited (ASX: DYL), Boss Energy Ltd (ASX: BOE), Energy Resources of Australia Limited (ASX: ERA) and Peninsula Energy Ltd (ASX: PEN) have also experienced a flurry of buying activity, surging between 20% and 40% this week.

The newest of all ASX uranium shares, 92 Energy Ltd (ASX: 92E) is another big winner, surging 104% this week to 51 cents. The uranium explorer was successfully listed on the ASX on 15 April at a listing price of 20 cents.

Uranium prices lift to 6-year highs

Uranium prices have been in a prolonged bear market after spot prices peaked at about US$135/lb in June 2007.

Between early 2016 and March 2020, it lingered below US$30/lb, rendering many producers unprofitable and discouraging new exploration projects. This explains why many ASX uranium shares are still down more than 90% from 2007 highs.

It wasn't until after the initial March COVID-19 sell-off in 2020 that uranium spot prices managed to climb above US$30/lb. This week, prices touched US$35/lb for the first time in six years.

To add some perspective, Paladin Energy recently announced plans to restart its "globally significant" Langer Heinrich mine. The company estimates that it will cost approximately US$81 million to restart operations, with life of mine production cash costs of US$27/lb. In addition to freight and logistics of US$0.95/lb and sustaining capex of US$2.90/lb.

Encouragingly, Paladin Energy believes there is an emerging "structural supply deficit with growing demand". The company's March equity raising presentation stated the "current primary uranium supply [is] unable to meet current demand".

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Share Gainers

3 ASX All Ords shares up 50%+ in March

These ASX shares have been on fire this month. But why?

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Share Gainers

Why Mesoblast, Patriot Battery Metals, Sigma, and Zip shares are pushing higher

These shares are having a good session on hump day. But why?

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Consumer Staples & Discretionary Shares

If you'd put $20,000 in this ASX retail stock at the start of 2023, you'd have $134,000 now

This online retailer has executed a remarkable turnaround for its investors.

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

It was back to earth for ASX shares this Tuesday.

Read more »