Expect a More Bullish 2025 for Uranium Stocks

While the softs have been leading the way, harder stuff has been softer. 

Copper has been down and to the right since ringing the $5 bell last spring. It has made $4 its new base, but needs to get convincingly above $4.30 to break bullishly out of its wedge. It’s trying.

copper coiling chart

The nickel chart looks similar. As does iron ore. Base and many critical metals are exhibiting similar wait-and-see signals as China has required more stimulus and growth in Europe and emerging markets remain muted. 

It’s a similar story with PGMs. 

Silver and gold have been the bright spots by far. Their long-term trends are clearly bullish. But one immediately searches for the next catalyst for higher prices — despite them being everywhere, from inflation risks to geopolitical risks to renewed Chinese central bank buying. 

The question on everyone’s mind is still: when are the miners gonna move?

Uranium spot prices have come down from their peak ~$106 per pound this time last year to ~$73 where they trade today. This has taken some froth out of the sector. Participants would have preferred a consolidation closer to $80. The market doesn’t care. From a technical standpoint, the current spot price is a good place for uranium to catch its fall. The contracted price remains higher. And the fundamentals of the sector are still as bullish as ever, and have in fact improved over the past year given the onslaught of tech-related announcements on the demand side and African and Russian turmoil on the supply side. To steal from a December special report on the metal put out by Sprott: 

We anticipate that the uranium supply-demand imbalance will continue through at least 2040. Demand for uranium may outstrip supply and reach a cumulative deficit of 1 billion pounds by 2040. The uranium market may see a cumulative deficit of 2.1 billion pounds when factoring in global net zero pledges.

Uranium supply and demand chart

Plus two key things happened this past November: 

  1. 31 countries committed to triple nuclear capacity by 2050 at the COP29 climate summit, up from 20 the previous year. Nuclear is coalescing as a go-to baseload clean energy source worldwide. 
  2. Russia preemptively restricted the export of enriched uranium to the US. The US was set to ban imports in 2027, but the timeline is now expedited. 

The uranium chart offers nice lines at $73. A nice cup has formed on the uranium spot price chart, and a breakout from the handle would take it back over $100.

U can handle this chart

It’s worth adding to quality uranium names now that the bull market has taken a year-long breather.

Call it like you see it,

Nick Hodge

Nick Hodge
Publisher, Resource Stock Digest