ASX uranium shares are rocketing on Wednesday.
While the All Ordinaries Index (ASX: XAO) is struggling to hold onto its 0.2% gains in morning trade, the leading uranium stocks are surging higher as a pack.
Here's what we're talking about. At the time of writing in late morning trade:
- Paladin Energy Ltd (ASX: PDN) shares are up 8.0%
- Bannerman Energy Ltd (ASX: BMN) shares are up 9.0%
- Deep Yellow Limited (ASX: DYL) shares are up 10.4%
- Boss Energy Ltd (ASX: BOE) shares are up 6.5%
Boom!
So, why are ASX uranium shares glowing so brightly today?
What's happening in the nuclear space?
While each company has its strengths and weaknesses, ASX uranium shares are all enjoying a heady tailwind from a fast-rising price for the radioactive metal they dig from the ground.
According to the latest research from Global X, spot uranium prices have leapt 47% year to date "amid a host of favourable supply and demand dynamics".
The uranium price is now up 125% since the end of 2020.
As the Fukushima disaster fades into history, some of the world's richest nations – including China, India, Japan, Europe, and the United States – are increasingly turning to nuclear to ensure reliable baseload electricity while moving towards carbon-free power generation.
The increasing demand for uranium comes amid a slower uptick in global supply, which poses a potentially ongoing opportunity for ASX uranium shares.
Indeed, the International Energy Agency (IEA) forecasts that nuclear capacity will need to double worldwide by 2050 if the globe is to reach its carbon reduction goals.
Noting the uptick in uranium interest and investments, Bloomberg Intelligence said:
Nuclear may become the key driving force in the decades-long energy transition. New demand in Europe, Asia and Africa for nuclear reactors and old reactor life-time extensions aligned to net-zero aspirations from governments — and the continued build-out of China's nuclear fleet — have driven spot uranium prices 125% higher since 2020.
While not focused specifically on ASX uranium shares, Arthur Hyde, a portfolio manager at Segra Capital, is bullish on the sector.
"We're most focused on uranium miners in public markets," Hyde said (quoted by Bloomberg). "For the supply and demand of this market to balance, we need new assets to come online."
Hyde added:
If you're going to insulate the US, Europe and Canada from the global fuel cycle, which is heavily dependent on Russia and China, the best way to do that is to build new mines, new conversion capacity, new enrichment capacity.
Enter ASX uranium shares.
According to Geoscience Australia, the Olympic Dam mine in South Australia – owned by BHP Group Ltd (ASX: BHP) – contains the world's largest uranium deposit.
Australia also has the world's largest Economic Demonstrated Resources (EDR) of uranium, and as of early 2020 counted as the third largest producer on the planet.
How have these ASX uranium shares performed this year?
2023 has seen a big turnaround in the fortunes of these four ASX uranium shares.
Since the opening bell on 3 January:
- Paladin Energy shares have gained 53%
- Bannerman Energy shares have gained 68%
- Deep Yellow shares have gained 101%
- Boss Energy shares have gained 127%
And with investor sentiment and global demand still running hot, there could be more gains on the table.
