ASX uranium shares are enjoying a strong run this week.
While that's par for the course over the past calendar year, uranium stocks came under selling pressure in February and into early March amid a 20% plus fall in uranium prices in just six weeks.
Of course, that retrace came on the back of uranium hitting 16-year highs in February.
While still below those highs, the price was back to US$88.50 per pound yesterday, up from US$83.10 a week earlier. The radioactive metal averaged $66.60 per pound in 2023, according to Bloomberg.
As you'd expect, the past week's price increase has rekindled investor interest in ASX uranium shares.
Here's how these five leading companies have performed since the opening bell on Monday:
- Paladin Energy Ltd (ASX: PDN) shares are up 9.4%
- Bannerman Energy Ltd (ASX: BMN) shares are up 19.1%
- Deep Yellow Limited (ASX: DYL) shares are up 11.7%
- Boss Energy Ltd (ASX: BOE) shares are up 2.2%
- Alligator Energy Ltd (ASX: AGE) shares are up 5.8%
For some context, the All Ordinaries Index (ASX: XAO) is up 1.4% for the week at this same time.
And there could be more outsized gains ahead.
Rising demand and sticky supply
ASX uranium shares appear well placed, with global demand for uranium broadly forecast to outpace supply growth over the medium term.
According to Jonathan Hinze, president of UxC (quoted by Bloomberg), "We have reached a bottom. The fundamentals are still strong, with increased demand and supply that hasn't fully responded."
The fundamentals do indeed look strong.
In December, 22 nations at the COP28 climate conference – including Japan, the United States and France – said they would triple their nuclear power capacity by 2050. At the moment, India and China – the world's most populous nations – are leading the world in constructing new nuclear power plants.
Addressing the outlook for uranium demand, and by connection ASX uranium shares, Treva Klingbiel, president TradeTech, said:
We have a number of geopolitical factors that have a really significant influence on buyer behaviour, even though fundamentally nothing has changed.
Buyers can use the spot to tell them the sentiment of the day but must look at the long-term market to see that it is marching steadily up; it hasn't taken a hiccup at all.
How have ASX uranium shares performed over the full year?
The All Ords has delivered a bank deposit busting 11.3% in gains over the past 12 months. And that's not including the dividends some of those stocks will have paid shareholders.
But some investors will have done much better.
Here's how these five ASX uranium shares have performed over that same period:
- Paladin shares have gained 132.5%
- Bannerman shares have gained 166.9%
- Deep Yellow shares have gained 150.0%
- Boss Energy shares have gained 121.9%
- Alligator Energy shares have gained 83.3%
As always, if you're looking at buying uranium stocks or any other ASX shares, be sure to do your own thorough research first.
If you're not comfortable with that or feeling time-poor, simply reach out for some expert advice.
