Uranium investment is gaining attention once again. This surge in interest is due to the rising prices of uranium, driven by an increased focus on nuclear energy. Global investment banks such as Goldman Sachs and Macquarie and hedge funds actively invest in uranium.
According to industry insiders, on the 21st, Goldman Sachs, Macquarie, and hedge funds are strengthening their investments in uranium. Goldman Sachs and Macquarie are increasing the trades of real uranium, with Goldman Sachs also engaging in options trading.
Some hedge funds are also bolstering their investments in uranium stocks and real uranium. This trend is interpreted as a sign that uranium, which experienced a slump for 10 years following the Fukushima nuclear disaster in Japan, is beginning to broaden its appeal to financial institutions.
Bram Vanderelst of trading company Curzon Uranium stated, “Due to positive headlines and momentum around nuclear energy, hedge funds, and other commodity investors are returning to the uranium sector.” He added, “Many are investing through Commodity funds, exposed to uranium prices directly.”
Uranium caught the attention of investors after its price doubled to $102 per pound when the industry’s largest producers, Kazatomprom and Cameco, lowered their production guidance last year. The difficulty uranium mines faced in ramping up production to meet new demand after resuming operations also influenced this trend.
In December of last year, the G7 countries (USA, UK, France, Germany, Italy, Canada, and Japan) announced plans to triple their use of nuclear energy by 2050, highlighting the importance of nuclear power in reducing carbon emissions.
Goldman Sachs has already begun using options on real uranium for hedge funds, marking the first instance of creating commodity derivatives on metals. Macquarie is focusing on enhancing uranium mining companies’ trading and marketing performance.
Goldman Sachs entered the uranium market in 2009 by acquiring NUFCOR, a nuclear fuel trading company based in London, UK. However, following the Fukushima nuclear disaster in 2011, which caused uranium prices to plummet, Goldman Sachs planned to sell NUFCOR but could not find a buyer and intended to wind down the business.
According to regulatory data, as of the end of 2022, NUFCOR held uranium inventory worth $356 million. This is enough to supply fuel to 17 large nuclear reactors for a year.
A Goldman Sachs representative stated, “We primarily trade with financial clients like hedge funds, and we cannot disclose specific information as it is confidential.”
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