Uranium Miners Monthly Report | October

24 October 2022

Uranium ETF Monthly Report: Key Takeaways

September saw virtually every asset class have substantial and synchronous drawdowns relative to their performance histories, and the uranium markets did not emerge unscathed. The U.S. equity market saw its largest monthly drawdown since March 2020, broad commodity markets had their second largest monthly drawdown since March 2020, the bond market had its largest monthly drawdown since February 1980, the U3O8 spot price had its largest drawdown since March 2019 and uranium mining equities had their worst monthly drawdown since the inception of the North Shore Global Uranium Mining Index in June 2017.[1] The uniting factor for the negative performance across asset classes has been the strength of the U.S. dollar (USD). The USD strength pushed asset classes lower over the month and comes on the back of the actions of the Federal Reserve (the Fed). At the September Federal Open Market Committee Meeting, the Fed raised rates by 75 bps for the third time in a row and reiterated its commitment to tightening monetary conditions until inflation moves towards the longer-term 2% target. As such, with high inflation persisting, the Fed tightening monetary conditions and low market depth and liquidity, the vast majority of asset classes were forced downwards.

The U3O8 uranium spot price fell from $52.83 to $48.25 per pound in September, a -8.66% decrease.[2] In response, uranium equities fell lower, with the Sprott Uranium Miners UCITS ETF losing -16.35% for the month. Regarding uranium mining equities, contextualizing this performance over a slightly longer time horizon paints a more fulsome picture. Over the third quarter of 2022, the Sprott Uranium Miners UCITS ETF still managed to buck the general market down trend with a 14.06% increase. The fundamentals of the uranium market continue to strengthen as global governments increase acceptance of nuclear power’s dual role in supporting the world’s energy transition away from dependence on fossil fuels and in ensuring higher energy security.

The European energy crisis continued to underscore the importance of nuclear energy and in turn uranium. European country’s stance on nuclear ranges from France’s, which had the largest share of nuclear in total electricity production in the world in 2021, to Germany’s, which is divisive and currently committed to a “nuclear exit”.[3] Despite these differences, both countries exemplified the importance of nuclear energy in September. French President Emmanuel Macron confirmed that he intends to expand nuclear power with six to eight new power plants planned and Germany confirmed that it would extend the life of two of the remaining three reactors.[4][5] These decisions showcase nuclear’s role in providing reliable power is especially crucial given the increased uncertainty of Russia as an energy provider. This uncertainty has only increased over the month, as on September 22 multiple leaks were found in two giant natural gas pipelines from Russia.[6] We believe that the energy crisis that many countries are facing provides the political will to galvanize public support for nuclear energy.

Positive reports continued to purport the growing need for nuclear power in the energy transition movement in September. The International Atomic Energy Agency put out a report noting that “total electrical generating capacity is expected to increase by about 23% by 2030 and then double by 2050”. Also, the United Nations Economic Commission for Europe released its report on Carbon Neutrality which highlights a significant need for and investment in nuclear energy. [7]

Cameco and Kazatomprom, the fund’s two largest holdings as of month end are the largest uranium producers in the world and continued to diverge in performance. Where Cameco outperformed the broader uranium market and Kazatomprom underperformed.

Number three position in the ETF, the Sprott Physical Uranium Trust (SPUT), holds approximately 58.6 million pounds of physical U3O8 uranium as of month end. Since August 2021, SPUT has been an active participant in the uranium spot market helping to enhance liquidity and price discovery. SPUT purchased approximately 1,000,000 lbs. of U3O8 uranium in September.[8] Physical uranium depreciated over the month but outperformed relative to the uranium mining equities.


Please remember that all performance figures are showing net data. Past performance is not indicative of future performance.


Macro Outlook

September's weak performance for physical uranium and uranium miners was a result of central bank interest rate increases in an effort to tame persistent inflation, and not factors related to the sector which continues to be supported by strong fundamentals. Year-to-date as of September 30, U3O8 conversion and enriched uranium prices have all significantly appreciated for both short- and long-term purchase contracts. Still, by contrast, the performance of uranium miners is now negative. We believe that the current demand for uranium conversion and enrichment, coupled with a shift away from Russian suppliers supports an increase in the U3O8 uranium spot price, which is ultimately supportive for uranium miners.

Faced with the prospects of energy shortages and rocketing energy costs, many governments are turning to nuclear energy to provide reliable, affordable base-load energy. Positive news headlines about the growing acceptance of nuclear power have been abundant. Japan's Prime Minister Fumio Kishida announced recently that Japan wants to restart seven nuclear reactors by next summer, will explore the development and construction of innovative next‐generation reactors and will consider extending the life of existing nuclear reactors. The South Korean government noted on August 30 that it planned to increase its percentage of total energy creation from nuclear to near 33% from a previous mid‐term plan of 25%. The U.S. extended the life of the Diablo Canyon nuclear power plant, passed the Inflation Reduction Act which will subsidize nuclear power plants' revenue if power prices were to fall and announced a plan to buy $4.3 billion in enriched uranium from domestic producers. In the EU, nuclear energy was included in the EU taxonomy and Germany has rethought plant closures. Finally, the G7 released a statement on reducing reliance on nuclear goods from Russia. We believe these developments are likely to bolster greater investment in nuclear energy, physical uranium and uranium miners.

We believe the uranium bull market remains intact despite the strong negative macroeconomic environment . Over the long term, increased demand in the face of an uncertain uranium supply is likely to support a sustained bull market. For investors, uranium miners have historically exhibited low/moderate correlation to many major asset classes, potentially providing portfolio diversification.

We continue to believe that physical uranium and uranium miners are well positioned to take share within the energy sector as energy security and decarbonization increase in importance. With the number of nuclear reactors planned to increase by 35%, governments are signaling the need to embrace the reliable, efficient, clean and safe energy produced by nuclear to meet ambitious decarbonization goals. At the same time, a uranium supply deficit remains entrenched and uranium miners may be the recipients of increased investment, which may in turn bring the market back into balance. [9]


Please remember that when you invest in ETFs, your capital is at risk.

Sprott Global Uranium Miners UCITS ETF (URNM) Performance Table (As of 30.09.22)








Sprott Global Uranium Miners UCITS ETF (URNM)







North Shore Sprott Uranium Miners Index








Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 30/09/2022 Performance before inception is based on back-tested data. Backtesting is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such a strategy would have been. Back-tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. When you invest in ETFs and ETCs, your capital is at risk.

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