BOE surged +6.1% on Thursday, tracking solid gains by the uranium names on overseas bourses, following a hike in extraction taxes in Kazakhstan, which will potentially limit future supply growth, a bullish development right after Biden signed the ADVANCE Act on Tuesday to support nuclear power. Two upcoming events may provide a catalyst for ongoing gains by uranium prices:
- At the end of this month, Cameco (CCJ US) will release its 2Q24 earnings – the company may provide revised guidance for CY24, or it could kick the can down the road to the 3rd quarter.
- On August 1st, Kazatomprom will release its 2Q24 production report – which may include revised and downgraded production guidance for CY25.
Global demand for uranium is about 180Mlbs per year, but the current supply is only ~140Mlbs per year. Kazatomprom produces about 40Mlbs per year. Demand for uranium has been growing again for the first time since Fukushima, particularly in China, which has aggressive plans to increase the size of its reactor fleet. A lot of the planned increase in production from Kazatomprom was destined for China, but Beijing may now need to source uranium elsewhere.
- We remain bullish on uranium and its related stocks over the medium term. The recovery in the sector has a long way to go, with supply remaining in a deep deficit and utilities not covered for their uranium requirements from 2026-2028.
MM is bullish towards BOE
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