Why ASX uranium shares are eyeing China’s US$450 billion energy plan

China could soon exceed the US as the world’s biggest nuclear energy generator

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ASX uranium shares have, broadly, trounced the benchmark returns this past year.

Take Paladin Energy Ltd (ASX: PDN), for example.

The Aussie uranium producer has seen its share price surge an eye-popping 659% over the past 12 months. That’s brought its market cap north of $2.7 billion.

Then there’s Boss Energy Ltd (ASX: BOE). The Boss Energy share price has surged 475% since this time last year.

And with a year-on-year share price gain of 224%, ASX uranium share Deep Yellow Limited (ASX: DYL) also stands far above the 16% returns delivered by All Ordinaries Index (ASX: XAO) over that same time.

But with such a strong run behind them, can these ASX uranium shares continue to grow?

All eyes on China

While most of the developed world has put a pause on new nuclear power plants, China is forging ahead at record pace.

And with Glasgow’s COP26 Climate Summit turning up the heat on coal-fired energy, China is banking on nuclear energy to provide reliable baseload power to supplement the more intermittent supplies delivered by wind and solar.

As Bloomberg reports, China is now forecast to build 150 – or more – new nuclear reactors by 2035. To put that in perspective, that will exceed the number of plants built across the entire world over the past 35 years.

Development costs are estimated at some US$440 billion (AU$602 billion). And all these new plants will require uranium to keep them running, which could prove good news for ASX uranium shares.

Commenting on the recent renewable energy issues in Europe, which has suffered from low winds and rainfall amid soaring fossil fuel costs, David Fishman, an energy consultant with The Lantau Group, said (quoted by Bloomberg):

Nuclear is the one energy source that came out of this looking like a champion. It generated the whole time, it was clean, the price didn’t change. If the case for nuclear power wasn’t already strong, it’s a lot stronger now.

How have these ASX uranium shares performed longer term?

Up top, we looked at how our 3 sample ASX uranium shares trounced the benchmark returns over 12 months.

But as long-term investors, let’s turn back the clock and see how they stack up over the past 5 years.

Using the All Ords as our benchmark again, the index has gained 43% in 5 years.

Over that same time, the Paladin share price is up almost 1,000%, the Boss Energy share price is up 750%, and the Deep Yellow share price is up 514%.

Advantage ASX uranium shares.

Should you invest $1,000 in Paladin right now?

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*Returns as of January 13th 2022

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.

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