How and Where to Trade Uranium: 2024 Investors Guide

Rook I Project hosts the ‘Arrow Deposit’ whose unique geological profile and location, according to the company, allows for key optimisation and development. The project is designed as an underground mining operation, with conventional mining methods. Initially, uranium is extracted from the ground using a method that dissolves it from its ore.

With various avenues for investment, including individual stocks, ETFs, futures and physical uranium trusts, you have multiple ways to engage with this unique market. There are several great companies out there, and the macroeconomic tailwind should push the entire industry higher over time. Nations are grappling with the need to reduce carbon emissions and navigate the energy crisis exacerbated by geopolitical tensions.

On the other hand, your pickings for uranium-focused ETFs are sparse compared to other industries. Japan’s announcement represents a significant policy shift to address issues, among them soaring prices, strained supplies and extreme weather. Japan isn’t alone – and the country’s shifting stance could compel other nations to reconsider, as well.

In fact, for many segments of the economy, demand for electricity is inelastic. According to the International mf global cfd trading cfd review Energy Agency, by 2035 more than 90% of net energy demand will derive from emerging economies.

One of its holdings is the Sprott Physical Uranium Trust, a fund that invests solely in physical uranium. As mentioned, it’s been credited with helping to boost prices and has become a popular investment vehicle. One option is the Global X Uranium ETF, which tracks national and international mining and production firms. You also have the Van Eck Market Vectors Uranium + Nuclear Energy ETF, a market cap-weighted index of uranium players. As more countries shift to clean energy, safe, affordable, zero-emission nuclear power looks more appetizing every year.

Indeed, Global X Uranium ETF’s holdings are almost entirely made up of international stocks. Canada accounts for a little less than half of net assets, followed by Australia (18%) and South Korea (12%). Even Japan, which swore off nuclear power after the 2011 Fukushima disaster, approved a policy in 2023 that will extend the operations of existing reactors and allow new reactors to be built.

Ships use uranium as a counterweight and it is also found in ammunition and armoured protective equipment. With a chemical symbol ‘U’, it is a naturally occurring material list of 20 best web development tools to consider in 2022 found in most rocks in concentrations of between two and four parts per million. Uranium is radioactive and decays over time releasing energy in the process.

URA provides comprehensive exposure to the niche uranium industry, with its portfolio of 48 stocks spanning miners, refiners, and manufacturers of equipment for both uranium companies and nuclear-facility firms. For investors who want exposure to the uranium market, but crave the diversity of a basket of equities instead of single stocks, exchange-traded funds (ETFs) are generally the way to go. The selection of uranium-focused ETFs isn’t very wide, but luckily for investors the options are growing. There’s also the Uranium Royalty Corporation, which makes physical uranium purchases and invests in uranium-based companies in exchange for royalties.

  1. They offer the potential for high returns but come with significant risks, including the possibility of losing more than your initial investment.
  2. At 31 March 2023, Yellow Cake held 18.8 million lb of U3O8 – equivalent to 14.6% of 2022 global uranium production.
  3. Uranium companies large enough to be a component of a particular stock index will always form part of a tracker fund designed to replicate the performance of the index in question.
  4. You also have the Van Eck Market Vectors Uranium + Nuclear Energy ETF, a market cap-weighted index of uranium players.
  5. This publicly-listed fund lists units that trade like stocks, with each representing a physical allotment held by Sprott.
  6. The World Nuclear Association projects a 30% increase in electricity generation from nuclear power by 2030 and a 35% increase by 2035.

Unfortunately, uranium also has a dark side, as the 2011 earthquake-tsunami-Fukushima reactor meltdown trio illustrated. Following the catastrophe, Japan shuttered its nuclear power plants, with many countries following suit or re-evaluating their own nuclear plans. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin.

Looking at unusual uranium investments

The Chicago Mercantile Exchange (CME) offers a contract on U308 (triuranium octoxide), the form in which uranium is mostly found in nature. As elevated fuel prices and extreme weather slam households (and budgets), public opinion appears to be shifting – and taking government policy with it. We’ve written extensively about trading platforms and investment apps elsewhere, paying special attention to the fees that providers charge (as these can vary significantly from one service to another). To compare fees, along with other key items of information, take a look at our pick of the best trading platforms and best investment trading apps.

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A closer look at the ETF’s meager 28 holdings, however, shows that NLR isn’t quite a pure-play on uranium as you might expect – or at least, not how you’d expect. That is, a little more than 40% of the fund is invested in plain ol’ utility stocks – companies such as Constellation Energy (CEG), Public Service Enterprise Group (PEG) and PG&E (PCG). It’s a small field – these are three of the most pure-play funds in the space, and they still collectively represent just over $5 billion in assets. But the best ETFs in the uranium space can provide a few different types of exposure to this rocketing commodity. Supply-side bottlenecks, however, such as the time required to restart idled mines and access to essential materials, present challenges.

How and Where to Trade Uranium: 2024 Investors Guide

As the trend toward clean energy continues, some believe that day is soon to come. Trading in a critical resource such as uranium is a way to add diversification to a portfolio. Many of the factors that move demand for nuclear power are different than the factors that affect stock and bond prices. Nuclear energy promises to fill these gaps as smaller, safer, more efficient models hit the market.

Most investing platforms offer the option to buy non-UK shares, including those suggested by our experts above. Note that investors looking to buy overseas stocks and shares are generally charged a foreign exchange fee of around 0.5% to 1% of the value of their purchase, along with a higher trading fee on international shares. Nonetheless, the horizon how to buy stormx continues to brighten for nuclear energy, and in turn, the small collection of publicly traded uranium stocks … the uranium ETFs that hold them. As the need for clean energy grows and uranium oversupply diminishes, demand for the energy fuel is likely to grow. Investing while uranium stock prices have room improvement could offer an opportunity.

With governments and organizations shifting their focus toward sustainable energy solutions, the demand for uranium is expected to rise. Last year I interviewed several thought leaders about uranium, and I have to say that I’m a fan from a long-term perspective as the quest for cleaner fuel alternatives intensifies. A single uranium pellet outperforms traditional energy sources in electricity generation. Uranium has faced difficulties since the 2011 Fukushima nuclear disaster, when tsunamis brought on by a massive earthquake crashed into and damaged several Japanese nuclear reactors. In the years since, fears over the radioactive risks posed by nuclear reactors, paired with excess supply, have weighed on prices.

These factors, along with geopolitical considerations, have pushed uranium prices higher, with them nearly doubling over the past year and rendering previously unprofitable mines viable once again. As the world economy expands, demand for power should grow, and uranium prices should respond favorably. New cities will require increasing amounts of electricity to power businesses and homes. As more countries seek to curb pollution while meeting energy demand, nuclear power demand could grow. Since nuclear power is used primarily to produce electricity, its increasing acceptance by the power generating industry is the main reason traders should consider the commodity. CFDs allow traders to speculate on the price of companies involved in the uranium industry.

With new capacity growing annually, the International Atomic Energy Agency forecasts that this could reach 12 percent by 2050. Lifted lockdowns and extreme weather around the globe increased demand for fossil fuels, while the Russia-Ukraine war dramatically slashed supplies. Since Japan suffers a dearth of native fossil fuels and isn’t connected to mainland power, the country’s imported energy costs have soared. By their niche nature, uranium companies will not form part of every actively-managed fund as their inclusion or omission will be down to the remit of each fund.

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