Looking for a Glowing Commodity? Try Uranium
Prices are up sharply as supply runs down, worsened by coronavirus-related mine closures.
Nuclear power is still growing.
Photographer: Glenn Campbell/Fairfax Media/Getty
Uranium is having a moment in 2020, climbing a third in six weeks while much of the commodities universe melts down. Years of poor economics and weak investment, combined with the impact of pandemic-related mine closures, are adding up to a supply squeeze, despite demand softened by industrial lockdowns. There will be no swift return to lofty levels last seen over a decade ago, but the metal may still be the only one to end the year with a record shortage and higher prices.
The start of the last bull run had plenty of similarities to today. Supply was suffering the effect of a long run of unimpressive prices. Thanks to revived interest in nuclear power, the spot market price for uranium surged by a factor of 13 between 2003 and 2007. That hastened a production splurge that put the industry into a steady downward slide, worsened by the Fukushima disaster in 2011. It then bumped along at levels that, adjusted for inflation, were near historic lows.