Uranium price momentum has accelerated over the past week, with prices exceeding US$80 per pound to reach a 15-year high, as financial institutions, producers and utilities remain active buyers, according to Jefferies analysts.
In an update to clients, they singled out the Sprott Physical Uranium Trust (SPUT), which recently secured a further $125 million in funding that will be put towards the purchase of physical pounds.
"SPUT has continued to be active in the market, purchasing 300,000 pounds in October and 400,000 pounds so far in November, which follows its resumption of purchases in September, its first since April," the analysts wrote.
They also believe most large uranium producers are short pounds, as industry giant Cameco cited the need to secure 6 to 8 million pounds of uranium by the end of 2023.
Uranium One has also been active seeking pounds in the spot market, with total industry spot purchases this year likely to push the market higher given supply tightness, they added.
Analysts at Jefferies also mentioned that the US, UK, France, Korea and other nations are set to jointly announce a renewed focus on nuclear energy to help meet global decarbonization and electrification goals as part of COP28, with the proposed plan calling for a tripling of nuclear capacity by 2050.
"With renewables starting to lose momentum, in particular offshore wind, such a declaration could mark a significant point for the future of nuclear energy," they wrote.
Paladin Energy (ASX:PDN) remains their favoured uranium exposure investment.