Due to COVID-19 containment measures as well as a slump in most every commodity outside of precious metals, uranium production is down by about 50%.
Haywood Securities added up the numbers after Cameco (TSE: CCO) announced operation suspensions, writing in a note published Tuesday that “the world’s largest producers [are] announcing a string of temporary production cuts and/or mine closures amounting to ~50% of global production due to COVID-19.”
On Monday, Cameco announced it is extending the temporary production suspension at the Cigar Lake uranium mine in northern Saskatchewan. The uranium giant also announced it was withdrawing guidance.
“The longer major supply sources are disrupted, the better the fundamental structure will be when we emerge from the pandemic as more inventory gets absorbed into the system,” wrote Haywood.
According to Business Insider’s commodity charts, uranium is trading above $30, a multi-year high. Cameco is up 2% today to $13.41 as of 2:49 EDT.