To The Moon

Kazakhstan's state-owned Kazatomprom, the world's largest uranium producer, has slashed its 2025 production guidance by 17%, falling short of market expectations. This news has spurred a surge in uranium stock prices as North American investors rush in.

Analysts note that this guidance is higher than 2024 levels but significantly below the extraction limits permitted under Kazakhstan’s underground use agreement. Kazatomprom accounted for about 22% of global natural uranium production in 2022.

The International Energy Agency (IEA) forecasts that nuclear power generation will hit a historic high by 2025. Nuclear power generation is expected to continue growing at about 3% annually through the end of 2026, which will boost uranium demand.

Bank of America reports that the uranium market's supply tightness might persist into 2025, pushing prices higher this year.

“This has lowered the entire production curve guidance for several years,” said Adam Rodman, founder of Segra Capital Management, last Friday. He described the outlook as “disappointing” and announced plans to invest in North American uranium mining stocks.

Segra Capital is already a shareholder in NexGen Energy and other mining companies. Rodman expects Kazatomprom will need regulatory approval to lower annual output at several key mines.

However, BMO Capital Markets analyst Alexander Pearce believes the uranium market will remain in a deficit. Earlier this year, uranium prices surged to a 15-year high of $104 per pound due to tight supply and increased demand.

As of August 23, 2024, here’s how some U.S. uranium stocks and ETFs performed:

- $Uranium(UEC)$ : Stock closed at $5.37, up 13.05%.

- $Cameco(CCJ)$ : Shares rose 5.57% to $42.61. The stock had fallen nearly 10% over the past month but is up nearly 20% over the past 12 months.

- $Energy Fuels(UUUU)$ : Stock increased 6.74% to $4.91, with analysts expecting further gains.

- $Nexgen Energy Ltd.(NXE)$ : Stock up 10.34% to $6.40, with analysts predicting more upside.

- $Denison Mines(DNN)$ : Shares jumped 14% to $1.71, with analysts projecting higher prices.

- $Uranium Royalty Corp.(UROY)$ : Stock price rose nearly 15% to $2.32.

- $Global X Uranium ETF(URA)$ : The ETF climbed 6.86% to $26.81, up about 16% over the past 12 months.