Up 70% in September, why the Paladin Energy (ASX: PDN) share price continues to rise
Image source: Getty Images
The Paladin Energy Ltd. (ASX: PDN) The stock price is booming in September, up 72% to an 8-year high at 86 cents.
Widespread buying in the uranium sector was supported by higher spot uranium prices, reaching a 6-year high of ~ US $ 35 / lb last week.
What drives uranium prices?
It can be difficult to gain exposure to the uranium market, with a limited number of listed uranium players to choose from and no formal spot market for physical uranium.
The uranium landscape has changed rapidly this year, after the Sprott Physical Uranium Trust began trading on the Canadian Toronto Stock Exchange on July 19.
The Sprott aggressively buys physical uranium in the spot market, stimulating demand and increasing transparency in the industry.
Sprott’s Twitter noted that the fund added 3.45 million pounds of physical uranium in September alone. The aggressive buying in the spot market coincides with recent strength in the Paladin Energy share price.
According to Kitco, analysts believe Sprott is a “critical factor behind the recent surge in the price of the energy metal. The Trust gives investors direct access to physical metal.
Sprott CEO Commentary
In an interview with Kitco News, Sprott CEO Peter Grosskopf said he sees the Uranium Trust as a “game changer for the uranium market” and expects “to see a demand for it. increasing investment in physical metal as industrial demand picks up “.
“We believe uranium is entering a new bull market as the world searches for a clean energy mix in the new green energy revolution,” he said.
This could put Paladin Energy’s share price in the spotlight, as the largest ASX-listed uranium player.
“If you want a low-carbon grid, you can achieve it by spending a huge amount of money and having a very inefficient grid, which is inherently unstable, or you include nuclear as a central part of the power base. We believe uranium has been underestimated for the past 15 years, ”Grosskopf said.
Paladin Energy Share Price Snapshot
The broader uranium industry, from large-cap players like Paladin Energy to small-cap explorers like Deep Yellow Limited (ASX: DYL), Energie Péninsule Ltée (ASX: PEN) and Vimy Resources Ltd. (ASX: VMY) have all emerged as some of the top performing ASX stocks over the past few weeks.
The Paladin Energy share price came to life this year after trading mostly sideways between 2015 and 2019.
Shares of Paladin Energy have risen 230% year-to-date to 86 cents, but well below their 2011 highs of nearly $ 5.