Goldman Sachs Boosts Physical Uranium Trades Amid Soaring Prices

Goldman Sachs, Macquarie, and some hedge funds have boosted physical trading and options trades in uranium amid soaring prices, as many countries look to increase nuclear power generation to meet their climate goals while reducing the need of fossil fuel imports.   

Goldman has been increasing trade in physical uranium and has created a derivative of uranium trading by writing options on physical uranium for hedge funds, sources at hedge funds and the trading industry familiar with the deals have told Reuters.

While investment banking giant Goldman Sachs is mostly doing business with hedge funds and other financial clients, Macquarie has been stepping up trading uranium output from miners, a source who has done business with both banks told Reuters.

Uranium is in a bull market as many economies look to use more nuclear power generation in a renaissance for the technology after the energy crisis and the Russian invasion of Ukraine.

At the COP28 climate summit at the end of last year, the United States and 21 other countries pledged to triple nuclear energy capacities by 2050, saying incorporating more nuclear power in their energy mix is critical for achieving their net zero goals in the coming decades.   

“The Declaration recognizes the key role of nuclear energy in achieving global net-zero greenhouse gas emissions by 2050 and keeping the 1.5-degree Celsius goal within reach,” the U.S. Department of State said.

As a result of the nuclear energy resurgence, uranium prices spiked early this year to a 16-year high after Kazatomprom—the largest uranium miner in the world—said in January that sulfuric acid shortages and construction delays at newly discovered deposits could lead to the company missing production targets—challenges that could remain into next year. 

Uranium prices have doubled over the past year to over $100 per pound amid tighter supply, and Western miners seek to boost output.

U.S.-based Uranium Energy Corp, for example, said last month it would restart uranium production at its fully permitted site in Wyoming as the resurgence in nuclear power has led to a new bull market in uranium.   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Rystad: Energy Transition Requires $3.1 Trillion in Grid Investment by 2030
• Can Hydrogen Cars Compete With EVs?
• Russian Rosneft Posts Nearly 50% Surge in Profits for 2023