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Significant increase in CCJ in 2021
Uranium prices are rising for three reasons:
CCJ's trend is your friend, and it's higher
Goals for CCJ in 2022 and beyond
Analysts are optimistic about one of the world's leading uranium producers
Uranium is a silver-grey metal in the actinide series of the periodic table. Its primary use is for fuel in nuclear power plants, turning the metal into an energy product. One kilogram of uranium can produce as much energy as 1,500 tons of coal.
Uranium also has uses for military nuclear weapons and other industrial and medical applications. Although uranium is considered a commodity, it is not traded as actively as other energy products and metals.
While , and coal, as well as base metals that have active futures markets where producers, consumers and speculators set prices, uranium is mainly traded by appointment. In 2021, the commodity bull market took uranium prices for the ride.
At the end of 2020, the price of uranium was around the $30.70 per pound level. As of December 31, 2021, it was trading $13 higher at the $43.70 level, a gain of more than 42% in 2021.
Cameco Corporation (NYSE:), headquartered in Saskatoon, is a Canadian uranium producer that sells the feedstock to nuclear facilities in the Americas, Europe and Asia. Canada is the second largest uranium producing country after Kazakhstan and ahead of Australia. the world's largest uranium supplier, with a production of 13,291 tons in 2019 and 10,736 tons in 2020.
Orano, the French producer, has produced 5,809 tons in 2019 and 4,453 tons in 2020. Cameco was third in 2019 with a production of 4,754 tons. In 2020 CCJ produced 3,021 tons.
Top 10 uranium mining companies in 2020
Source: Kitco
The graph shows that Cameco has a significant global presence. The declining production in 2020 was the result of mining interruptions due to the global pandemic.
Meanwhile, CCJ stocks have risen significantly after bottoming out in early 2020.
Source: bar chart
The chart highlights the bullish trend in CCJ stocks, which rose from $5.30 on March 18, 2020 to a high of $28.49 on November 8, 2021, a gain of 437.5%.
At $21.81 as of December 31, 2021, CCJ was 311.5% above the March 2020 low and 62.8% above the closing level of $13.40 on December 31, 2020. With only one trading day to date By 2022, it was closed on Mondays at $22.71, up 4.13% for the day. Uranium prices are rising for three reasons. per pound level as of December 31, 2020.
Source: trade economics
The chart shows uranium was at $43.65 at the end of 2021, up 42.2% for the year.
At least three factors drove the price of uranium up in 2021:
Rising inflation pushed up all commodity prices in 2021.
The demand for alternative and renewable energy sources for nuclear energy is rosy in the coming years.
Traditional energy prices rose significantly in 2021, with crude oil rising more than 50%, natural gas almost 47% higher and thermal supply in Rotterdam more than 70%.
Uranium is considered both a metal and an energy product. Meanwhile, a composition of the six base metals on the London Metals Exchange is up more than 38% in 2021.
CCJ's trend is your friend, and it's higher of raw material producers tend to provide leverage compared to the minerals, metals and other raw materials they extract from the Earth's crust. They often outperform commodities price action during bull markets and underperform when prices fall.
In 2021, uranium gained 42.2%, while CCJ shares rose 62.8%.
The trend in uranium and CCJ was higher, and the end of 2021 and the path of least resistance of prices reflect market sentiment that higher prices are in store for 2022. Cameco stocks in 2022 and beyond
As we enter 2022, Cameco stocks have a lot of upside potential based on past price action and rising global demand for uranium.
Source: bar chart
The chart shows CCJ stocks rose above the first technical resistance level of March 2014, reaching $25.84 high in 2021 when they hit $28.49 in November. The next target is at the 2011 high of $44.81.
In addition, the all-time high in 2007 was $56.00 per share.
