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Highlights
- Uranium miners drive gains in the ASX energy sector.
- Energy becomes the best-performing ASX sector mid-trading.
- Global uranium demand projected to rise significantly by 2040.
The energy sector on the ASX experienced a strong rally, led by uranium mining companies, amid rising optimism about the future of nuclear energy. By mid-trading, the energy sector had outperformed all others, with a notable gain of nearly 3%. This came as the broader ASX market also posted gains.
Among the standout performers were uranium-focused stocks, with (ASX:DYL) Deep Yellow climbing over 8%, (ASX:PDN) Paladin Energy surging 6.5%, and (ASX:BOE) Boss Energy increasing by 5.6%. These companies were among the top five performers on the ASX 200, reflecting renewed investor confidence in the uranium space.
Coal stocks also saw substantial increases. (ASX:YAL) Yancoal gained 6.3%, while (ASX:WHC) Whitehaven Coal rose 4.3%, showcasing the broad strength of energy stocks. Meanwhile, heightened geopolitical tensions, particularly surrounding the ongoing Russia-Ukraine conflict, pushed oil and gas stocks higher. Companies such as (ASX:KAR) Karoon Energy, (ASX:WDS) Woodside Energy, (ASX:STO) Santos, (ASX:ALD) Ampol, and (ASX:BPT) Beach Energy recorded gains ranging from 1.4% to 4.6%.
The rally in uranium stocks aligns with growing global focus on nuclear energy as a cleaner power alternative to meet rising electricity demand. According to RBC Capital Markets, global uranium requirements are expected to grow by over 50% by 2040. However, the supply side faces significant challenges. Current uranium supply remains tight, and even projected increases by the early 2030s may struggle to meet demand due to potential execution risks.
Further into the 2030s, a substantial uranium deficit is anticipated, with RBC forecasting supply to cover only 80% of demand. To meet realistic demand scenarios, nearly all advanced uranium projects in development would need to become operational.
The long-term outlook has supported uranium prices, which RBC expects to remain elevated for at least the next decade. The firm projects average uranium prices of US$90 per pound between 2025 and 2028, compared to current levels of US$80 to $85 per pound.
The rally reflects the broader optimism surrounding nuclear energy's role in achieving cleaner and sustainable electricity solutions globally, with uranium miners positioned to play a critical role in meeting this growing demand.
