The radioactive material used in nuclear reactors was the best performing hard commodity in 2018. Renewed interest among investors in uranium has been sparked by a decline in supplies of the commodity at a time when geopolitical tensions are stoking demand.
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trading at around $29. Bank of America’s commodities team has increased its price estimates for uranium concentrate, known as"yellowcake," for 2019 and 2020 by 22% and 32%, respectively. The administration is also considering a 25% domestic production quota for national security reasons under a Section 232 petition, a trade law that allows imports to be subject to duties if they are deemed to be a threat to U.S. national security. It was the clause under which President Donald Trump imposed tariffs on imports of steel and aluminum last year.
According to J.P. Morgan's research, Kazatomprom is the largest and lowest cost uranium producer globally. accounted for about 40% of global production in 2017, and is projected to produce about 59 million to 60 million pounds of uranium concentrate in 2019 and 2020. 's stock currently trades at an estimated price to earnings ratio of 8.6 and dividend yield of 8.7% in U.S. dollars.
Uranium concentrate, commonly known as U3O8 or yellowcake, sits in the Uvanas processing facility near the East Mynkuduk uranium deposit in Kyzemshek, Kazakhstan. China is also likely to recommit to the use of nuclear power as the country is weighing off the macro impact of the U.S.- China Trade War on global energy supplies. Uranium demand should increase as a result of new nuclear-power plants in China that are shown in the central government's plan. If its 2020 target is achieved, China would jump to second in the world from fourth in terms of nuclear-power plant capacity.
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