Canada is the second largest producer of
uranium globally with over 13 thousand tonnes produced in 2015. However, the
fortunes of the uranium-making industry have been declining over the past
decade: uranium has never recovered from the impact of the Fukushima nuclear
disaster, which took place in 2011, and the uranium spot price is currently near
the 12-year low.
Source: cameco.com
The demise of the uranium price has led to
the decline in the share price of many uranium stocks. For example, the biggest
Canadian uranium company, Cameco Corp. (TSX: CCO), has been underperforming the
S&P/TSX Composite Index for almost two years now.
Source: fool.com
However, many experts think that the price
of uranium is currently bottoming out as the spot price has held above its
long-term low level posted in November 2016. Such factors as shrinking supply (many
of the biggest producers have cut back output); continued buildout of nuclear
reactors (especially in China, the Middle East and Asia), and political support
for a shift to carbon-free sources of energy, have been cited extensively as
positives for the price of uranium for the near future. These factors have not yet
caught the fancy of investors, yet the sheer longevity of the downturn in the
price of uranium may serve as an optimistic factor in itself.
Ukrainian Credit Union Limited
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