The Stock Set to Get U.S. Investors' Hearts Racing... Company in Focus as U.S. Nuclear Power Rebounds [Weekend Money]

U.S. Cuts Reliance on Russian-Enriched Uranium and Expands Nuclear Power
Expands into Nuclear Plant Design and Construction with Westinghouse

The U.S. policy to revive its nuclear power industry is reshaping the global uranium market. As efforts to reduce reliance on Russian-enriched uranium and build a domestic-centered nuclear fuel supply chain gain momentum, uranium producer Cameco is attracting attention as a potential beneficiary. Its investment appeal is also enhanced by its expansion beyond uranium mining into nuclear fuel conversion and enrichment, as well as nuclear plant design and construction.

A key driver of Cameco's growth is the rise in long-term uranium contract prices. At the end of the third quarter of this year, the long-term contract price for uranium was $96.5 per pound, up 16.3% from a year earlier. Cameco has secured sales contracts for an average of more than 28 million pounds annually over the next five years.

The fact that uranium supply is unable to keep pace with demand is also a positive factor. New mines require substantial development costs and lengthy permitting processes, making it difficult to increase supply in the short term. Meanwhile, as nuclear power plant construction expands, led by the United States, competition to secure nuclear fuel is intensifying.

Han Seung-hoon, a researcher at Shinhan Securities, said, "Restrictions on U.S. imports of Russian-enriched uranium and policies to expand nuclear power are making it increasingly important to secure a nuclear fuel supply chain in the Western world." He added, "Cameco's supply reliability and pricing power are expected to come into focus."

Another point worth noting is that the company's business is not limited to uranium mining. Cameco operates a uranium conversion facility in Port Hope, Canada, and has also secured an exclusive sales contract for all of the future enriched uranium production of GLE, a global enrichment company. GLE is targeting initial operations in early 2030, subject to permitting and a final investment decision. This broadens the potential benefits across the entire nuclear fuel supply chain, from uranium mining through conversion and enrichment.

Over the medium to long term, the potential revaluation of its subsidiary Westinghouse is key. Westinghouse is targeting the global market for new nuclear power plants with its AP1000, a next-generation reactor model. It has begun procuring long-lead equipment for the first AP1000 unit in Poland and secured a Front-End Engineering Design (FEED) contract with Slovakia, an early-stage project.

Expansion of its U.S. business is also anticipated. The U.S. Department of Energy (DOE) is pursuing $17.5 billion in loans for long-lead equipment, while the U.S.-Korea Investment Framework is also cited as a foundation for expanding nuclear power plant orders. According to Shinhan Securities, Westinghouse's AP1000 project pipeline comprises approximately 91 units, with a total capacity of 105 gigawatts (GW).

However, it will take time for these projects to contribute to actual earnings. Nuclear power projects take a long time to reach commercial operation after contracts are signed, as they must go through permitting, equipment procurement, and construction. Shinhan Securities said that the signing of specific contracts for new U.S. nuclear power projects and the actual placement of equipment orders would determine whether Westinghouse is revalued.

Han said, "The focus should be on the medium- to long-term growth inflection point rather than short-term earnings." He added, "In addition to improved profitability from rising uranium prices, if U.S. nuclear power projects lead to actual contracts, Cameco's business value could rise to a new level."

This content was produced with the assistance of AI translation services.