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Date : 10/09/2022

Uranium Shares ASX are Surging. How can Paladin Energy (ASX: PDN) Benefit from It?

The world is exploring ways to drastically reduce carbon emissions and extend its faith in a nuclear-powered future instead of relying on producing energy through coal, gas, and oil.

The uranium stock ASX market received a huge boost a few weeks ago. In a recent announcement, the Japanese government aims to increase nuclear power production. Japan has announced plans to restart seven idle units and pursue developing next-generation nuclear power projects. Investors in ASX uranium companies responded favourably to the news by bidding up their stock prices. This is huge news because it is a complete reversal of policy by the Japanese government.

Japan is also not alone. While Australia is still talking about nuclear power, most of Europe, the USA, China, and India have already outlined plans to adopt nuclear energy as one of the main sources. Both Belgium and Germany are considering extending the life of their nuclear plants. This is largely because of a severe energy shortage made worse by Russia’s invasion of Ukraine.

Here in Australia, we have massive uranium reserves, and a huge export market is brewing, resulting in uranium stock ASX price surging over the past couple of weeks.

At the same time, France has announced plans to construct 14 new nuclear power reactors by the decade’s end. India has also joined the race and is considering a similar increase in nuclear power output. India is the world’s second-most populous country; they have nuclear power as its fifth-largest source of electricity.

You might like: Top ASX Uranium Stocks For 2023


Why is Nuclear Power Production Going Up?

As a result of the ongoing global energy crisis, which has been made worse by Russia’s invasion of Ukraine, nations worldwide are either working to extend the lifespan of their existing reactors or are putting forth plans to construct new ones.

India, Germany, Belgium, and France are examples of these countries planning to increase their nuclear energy production. They are taking severe measures to combat the rising energy crisis.

EDF, a French state-controlled energy firm, is preparing to restart 32 of the country’s reactors that have been shut down for maintenance. This accounts for more than half of France’s 56 nuclear power facilities.

Currently, Kazakhstan is responsible for producing more than 40% of the world’s uranium. Although it possesses at least 25% of the world’s confirmed uranium resources, Australia is still far behind in its production of uranium compared to other countries.

Uranium shares ASX investors expect it to produce some long-term tailwinds for the sector as a growing number of countries switch to nuclear power for their baseload generation.

Paladin Energy Ltd (ASX: PDN)

As a result of the recent catastrophe in global energy markets, investors have shown renewed interest in uranium stock ASX as several countries turn inward to rely more on their own energy resources.

The price of uranium has rebounded from its recent lows and is currently more than US$52/Lb, where it was in May 2022. Simply put, this has the highest prices in the past decade.

So, how can Paladin Energy (ASX: PDN) benefit from this?

If we look at the chart below, it shows a positive sentiment for Paladin Energy Ltd (ASX: PDN) stock since the end of 2020. It was when the world was hit by the deadly coronavirus, and the countries realised a severe need to shift to cleaner energy sources. That is why we can see a spike in the growth of PDN’s uranium stock ASX price towards the end of 2020.

Paladin Energy Limited ASX

Considering the continued unpredictability of wintertime energy storage supplies, it is not surprising that alternatives like uranium are still in high demand.

While everything is going on, Refinitiv Eikon data shows that four out of five brokers consider Paladin a buy at present. Most of them indeed agreed on a price target of $1.09 apiece.

PDN stock price has surged by 7% during the past 52 weeks. We’ll have to wait and see how that will affect Paladin’s uranium stock ASX price in the near future.


Previous ASX Uranium Shares Articles:

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