By: Visual Capitalist
Uranium miners up 59% since election on pro-nuclear hopes
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
Uraniumís spot price had a rough ride throughout the course of 2016, but for many investors there is suddenly a new aura of optimism around the troubled metal.
It all starts with Donald Trumpís ďAmerica FirstĒ strategy, which is being perceived by many as a potential boon to the uranium sector. Official details are slim, but industry executives are currently speculating that the Trump administration will be better for nuclear power than the previous government.
If thatís true, then it would mean far less regulatory hurdles for nuclear power, and likely even funding to bring more power plants online in the United States.
A Shot in the Arm
Perhaps such a catalyst is just what the metal needed. Both the spot price and the share prices of uranium miners have been in a gruesome bear market ever since the 2011 Fukushima incident in Japan. The prolonged pain has weathered down investors and companies alike, but everything has to bottom at some point.
As David Erfle from Kitco pointed out last week, the chart for the the Global X Uranium ETF (URA) makes any other downturn look like a piece of cake. The ETF, which tracks global uranium miners, has lost a whopping 90% of its value over the last six years, including two rollbacks (in 2013 and 2015).
Lately, thanks to the ďTrump bumpĒ and a 10% production cut in Kazakhstan announced earlier this month, the URA is suddenly buzzing with volume. The ETF is now back up on its feet, gaining a solid 59% since the election.
But Can Uranium Be Great Again?
A bounce in uranium stocks is something that was way overdue. However, if nuclear-related announcements arenít made soon from the Trump administration, the newfound optimism could fade pretty fast.
Statistically speaking, the World Health Organization says that nuclear power kills less people per terawatt hour than any other major source of power, even rooftop solar. Nuclear is also friendly from an emissions perspective: using a life-cycle emissions analysis, nuclear generates similar emissions to wind or hydropower.
The problem, of course, lies in the fat tail risk of a nuclear catastrophe, which is something that is still fresh in peopleís minds in the wake of Fukushima.
Whether nuclear and uranium can be great again depends on the publicís tolerance for such projects, as well as a significant amount of support from the government to push new projects through. The rally is much welcomed by uranium investors Ė but it will remain unclear if it has any long-term legs until these two considerations are met.
Courtesy of: Visual Capitalist
-- Posted Friday, January 27 2017 | Digg This Article |
Previous Articles by Guest Authors
UraniumSeek.com, Gold Seek LLC
The content on this site is protected by U.S. and international copyright laws and is the property of UraniumSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on UraniumSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.
The views contained here may not represent the views of UraniumSeek.com, its affiliates or advertisers. UraniumSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of UraniumSeek.com, is strictly prohibited. In no event shall UraniumSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.