Cameco $CCJ stock is testing a downtrend channel breakout on January 8, 2023, as rumors circulate that demand for uranium is exploding higher on the massive need for clean nuclear power. Cameco stock is in a technical downtrend.
Westinghouse Electric Company was recently purchased by Cameco from Brookfield Renewable Partners (BEP). As a result, Cameco can no longer be considered a pure-play uranium player. Cameco is a utility company attached to an integrated uranium operator. Cameco’s profitability will be more stable because of the purchase of Westinghouse Electric Company.
The Oregon Group Report Forecasts 10-year Bull Market for Uranium
According to a report published by the Oregon Group on November 10, 2022, the 10-year bull market in uranium is just getting started. The Oregon Group predicts that a significant net increase in nuclear reactors, which use uranium as fuel, will have a favorable effect on the uranium market. Decarbonization, the commercialization of small modular reactor technology, and energy security are some of the major factors that have contributed to this growth, which are examined in the report. In addition, uranium market analysis indicates a significant decline in current global stockpiles, a lack of production in the near future, and the possibility of a supply shortage.
The 10-year downturn that the uranium market experienced, during which mines were closed, development projects stalled, and many exploration companies ran out of money, has just ended. Mine restarts have been announced in response to rising uranium prices. The supply, however, is not well positioned to meet anticipated demand over the next few years due to declining reserves and grades at existing producers and the lack of advanced development projects. Producers have stated unequivocally that much higher incentive pricing is necessary for new production.
Nuclear power was recently designated as green energy by the European Union, opening the industry up to multi-billion dollar green financing. Uranium is one of the most energy dense fuels ever created and is used in nuclear reactors to produce emission-free energy. The same factors have significantly contributed to the shift in public opinion in favor of uranium and nuclear power around the world. This is particularly clear in Japan, where the vast majority of people now support restarting the nation’s reactor fleet.
The significant geopolitical changes brought on by the US destabilizing Ukraine under the Obama regime in 2014, when the country’s elected President was overthrown in a coup backed by the US, are also having an impact on the uranium market. Russia moved into Ukraine to stop the 7-year civil war which in turn has caused an energy war. Consumers of uranium (power utilities) are currently changing their perspectives on jurisdiction as a result of supply security. The Oregon Group thinks that Kazakhstan’s proximity to Russia and other factors will have an impact on future supply dynamics. Kazakhstan is currently the world’s largest supplier.
Cameco Produces First Packaged Pounds Following McArthur River/Key Lake Restart
The first pounds of uranium ore from the McArthur River mine have now been ground and packaged at the Key Lake mill, marking the achievement of initial production as these facilities return to regular operations, according to a November 9, 2022, Cameco announcement.
“McArthur River and Key Lake are among the best and most prolific uranium assets on the planet, and after building homes for these pounds in our long-term contract portfolio, we are delighted to have them back in production,” said Cameco president and CEO Tim Gitzel. “Market conditions have continued to strengthen since we announced their planned restart, with growing geopolitical uncertainty adding to energy security concerns worldwide, and the ongoing global emphasis on decarbonization and electrification only gaining momentum.”
Due to the persistent weakness in the world uranium market, production was halted at McArthur River and Key Lake for roughly four years starting in January 2018. When the market started to noticeably improve in February 2022 and more long-term contracting activity started to add sizeable volumes, Cameco announced the planned restart of both operations.
The completion of crucial automation upgrades, maintenance readiness checks, restaffing, recruitment, and training for key positions at both facilities resulted in this initial production, a significant milestone for the operations. The mine and mill currently employ about 730 full-time staff members and long-term contractors, and future hiring is anticipated. Final commissioning activities will continue at the sites to guarantee that target production rates can be met and that normal operating conditions are being attained.