Uranium Prices Soar Over 125% as Supply Squeeze Stokes Bullish Sentiment, But Peak Could Be Coming
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Uranium prices and related stocks have soared over 125% since June 2022, significantly outperforming other commodities. However, investment vehicles now trade at discounts to net asset value.
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Spot trading remains tight as utilities struggle to secure supply, but higher prices are incentivizing miners to increase production over the next 2-3 years. This could peak prices.
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Kazatomprom aims to boost production by up to 21 million pounds through 2025, the most significant supply increase in the near term. New mines are still years away.
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With tight supply, there are risks of potential government intervention forcing trusts to sell uranium, which could spark an initial selloff.
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Sentiment and long-term demand look positive with major commitments to nuclear power expansion, but investors should prepare for either a price spike or more gradual moves and size positions accordingly.