Twelve years ago, a three-story wave devastated the Fukushima Daiichi nuclear power plant...
That day, a 9.0 magnitude earthquake struck off the coast... setting off a tsunami. The plant was already being cooled by backup generators after the quake shut down three of its reactors. Then, the wave came.
The backup cooling system failed. That led to a reactor malfunction... and caused the worst nuclear meltdown since Chernobyl.
Sixteen workers were injured by steam explosions. More than 164,000 locals were evacuated from their homes. And the region is still dealing with the aftereffects, with consequences for people's health and the environment.
The Fukushima disaster led to global backlash against nuclear power. Some countries closed existing plants after the meltdown... while others stopped planning new ones.
But today, that's changing...
Sentiment toward nuclear power is turning a corner. And that could kick off a major bull run for one left-for-dead nuclear commodity...
Nuclear power could be the key to our green-energy future.
It's a carbon-neutral power source. So it can power the grid without polluting the air. And it's more efficient than fossil fuels.
But you can't have cheap nuclear power without uranium...
It's an abundant, dense metal with one important property – its atoms are easy to split apart. Splitting atoms releases massive energy. And nuclear plants can harness this energy for industrial use.
Uranium prices plummeted after Fukushima. World governments wanted distance from nuclear power. But today, the price of uranium is soaring. Take a look...
After the big slide that followed the disaster, uranium is now at an 11-year high. But we expect it to keep climbing, for two reasons...
First, consumers are once again embracing the potential of nuclear energy. According to a recent Pew Research Center survey, more than half of Americans support more nuclear power today. And it's getting more popular as time goes on.
Second, we've had a massive undersupply of uranium since Fukushima.
You see, when uranium's price was falling, miners couldn't turn a profit by producing it. So they stopped digging it up. From 2016 to 2020, global uranium production dropped by a quarter.
These twin forces are setting up a huge imbalance between supply and demand.
According to the World Nuclear Association and Reuters, demand for uranium in nuclear reactors is expected to climb 28% by 2030... and to nearly double by 2040. Yet supply is still scarce after a decade of low production.
That means the 11-year high in uranium prices is likely just the beginning of this asset's bull run. It could take months – or even years – for the supply squeeze to play out.
Uranium has room to soar in the long term. So if you want to add the metal to your portfolio today, one easy way to do it is with the Sprott Physical Uranium Trust Fund (SRUUF)...
This exchange-traded fund is dedicated to holding just one asset – physical uranium. It lets you get access to the uranium market through a simple investment in your brokerage account.
Like the metal itself, SRUUF is breaking out to new highs today. But don't think you've missed the rally.
The nuclear supply squeeze will take a long time to unwind... And until it resolves, expect uranium to keep marching higher.
Good investing,
Sean Michael Cummings
Further Reading
The 2022 rally in oil stocks didn't last. Investors lost interest as prices stalled out. But one part of the energy sector recently went on a tear – and it means the trend is turning back in our favor... Read more here.
We're seeing a huge gap between perception and reality when it comes to energy stocks. Green energy is advancing – but we'll still need fossil fuels in the coming decades. Not only that, but the pressure on oil companies is actually driving a long-term uptrend in oil and gas... Learn more here.
HIGHS AND LOWS
NEW HIGHS OF NOTE LAST WEEK
Blackstone (BX)... asset management
Markel (MKL)... insurance
Splunk (SPLK)... cybersecurity
Akamai Technologies (AKAM)... cloud services
Reata Pharmaceuticals (RETA)... biopharmaceuticals
Toyota Motor (TM)... automaker
Honda Motor (HMC)... automaker
Sprouts Farmers Market (SFM)... grocery stores
Murphy USA (MUSA)... gas stations
Ryder System (R)... logistics
Marathon Petroleum (MPC)... oil and gas
Enterprise Products Partners (EPD)... oil and gas
Valero Energy (VLO)... oil refiner
Energy Transfer (ET)... natural gas
Cameco (CCJ)... uranium
NEW LOWS OF NOTE LAST WEEK
MarketAxess (MKTX)... electronic trading
Block (SQ)... cashless payments
Pfizer (PFE)... pharmaceuticals
ResMed (RMD)... medical devices
Target (TGT)... big-box retailer
Dollar General (DG)... discount retailer
Estée Lauder (EL)... cosmetics
Chewy (CHWY)... pet products
Peloton Interactive (PTON)... e-fitness fad
Extra Space Storage (EXR)... self-storage
Southwest Airlines (LUV)... airline
JetBlue Airways (JBLU)... airline
RTX (RTX)... "offense" contractor
SBA Communications (SBAC)... cellphone towers
American Tower (AMT)... communications REIT
Crown Castle (CCI)... communications REIT
