The closing bell has sounded, marking the end of another day on the ASX. The Boss Energy Ltd (ASX: BOE) share price racked up a 6.9% gain, taking the uranium company's shares to a year-to-date rise of 23%.
While the performance was impressive compared to the 0.7% decline in the S&P/ASX 200 Index (ASX: XJO), it was outdone by another popular uranium name, Paladin Energy Ltd (ASX: PDN). The larger uranium producer climbed 10.9% to an 11-year high.
Nevertheless, Boss Energy secured a fresh high of its own on Wednesday. Closing at $4.95 apiece, the $2 billion energy company cemented a new all-time high share price.
Uranium demand not running out of steam
Countries globally are battling to reach their climate goals while maintaining a reliable energy supply. A growing cohort is rallying behind the use of nuclear energy to kill two birds with one stone.
In the last 24 hours, France's energy minister Agnès Pannier-Runacher concluded the country may require more nuclear reactors than initially anticipated to meet its energy transition goals. Instead of the six originally planned for development, Pannier-Runacher suggested more than 14 could be needed.
News out of the United States overnight also increased the anticipation of upside pressure on uranium prices. According to Reuters, the US government wants to create a domestic supply of enriched uranium fuel.
The fuel is intended for next-generation nuclear reactors, but commercial quantities are only available from Russia. As such, the US Department of Energy is looking for a local enrichment service company for a 10-year contract.
Legislators in the US moved to ban the importation of enriched uranium from Russia in December. Exemptions are intended to be in place until 2028 to allow an orderly transition. However, the concern is Russia may move to pull the pin completely on supplying the United States in retaliation.
All this may explain why ASX uranium shares, including Boss Energy, had such a strong day today.
Has the ship sailed on buying Boss Energy shares?
It is still difficult to value Boss Energy shares as the company is still working on reaching production. Management is expecting to achieve this milestone in the first half of 2024 at both the Honeymoon and Alta Mesa sites.
Investors will have a clearer picture of potential revenue and margins once operations are up and running. Until then, the Boss Energy share price somewhat acts as a proxy for the price of uranium.
On this, Michael Gable of Fairmont Equities shared a rosy view on uranium prices with The Bull at the beginning of the year, stating:
Uranium prices have increased more than 60 per cent in calendar year 2023 up to December 21, and I expect this upward trend to continue in 2024.
Although Paladin Energy was Gable's preferred pick.
