The long-term trajectory for EVs is positive despite the recent slowdown. The EV industry is navigating the typical challenges of early technology adoption, with continuous investments and technological advancements driving the transition to electrification. Lithium-ion batteries (LIBs) are the preferred battery technology for EVs, thanks to their superior technical properties and significant investment in their development and infrastructure.

The uranium price increased in October, reaching a 12-year high at $74.48 per pound. Although uranium mining stocks pulled back last month, the stronger uranium price has boosted producer revenues and the potential for mine restarts and new developments. A growing supply deficit is helping to support higher price levels as the West focuses on reshoring supply chains. 

As the United States advances in its pursuit of clean energy, it is strategically redirecting its energy security emphasis from oil to critical minerals. This dynamic shift is designed to decrease reliance on oil, and diminish the influence of oil geopolitics and the sway of petrostates such as Russia.

Uranium's performance helped the energy transition complex close higher in September. From a macro outlook, solar panels are emerging as a critical player in the global energy transition. Evolving technologies in renewable energy, especially in the solar space, are driving a surge in silver demand which may likely outpace supply over the next decade.

Uranium and uranium mining stocks posted their best month in two years, as the price of U3O8 reached a 12-year high. YTD as of 9/30/23, physical uranium has risen 51.88% and uranium mining equities have gained 23.93%. Positive sentiment toward nuclear power is growing, and the WNA estimates that uranium demand will double by 2040. Western nations are strategically maneuvering to reduce their dependence on Russia for both uranium supplies and related services.

The global nuclear power industry is experiencing a revival. Geopolitical events and a surge in energy demand have shifted sentiment positively, with countries investing in new nuclear reactor builds, restarts and extensions. This has created a growth opportunity for uranium miners, especially as the uranium supply is facing challenges in meeting current and future demand.

Uranium and uranium mining stocks had a strong month in August. YTD as of 8/31/2023, spot uranium and uranium mining stocks have climbed 25.49% and 21.52%, respectively, outperforming the frothy S&P 500 TR Index's YTD return of 18.73%. We believe the uranium bull market is intact and favorable supply-demand dynamics will likely continue to provide support.

Uranium had a strong month in August, contrasting with the decline of most energy transition metals due to China's economic troubles and shadow banking woes. The investment capital spurred by the U.S. Inflation Reduction Act (IRA) is turning the U.S. into a cleantech powerhouse, reshaping global economics. The old China-led commodity supercycle is giving way to a new U.S.-based supercycle focusing on clean energy and innovation.

Electric vehicle (EV) adoption has surged in recent years, creating unprecedented demand for lithium, a critical component of EV batteries. With lithium demand expected to rise substantially in the years ahead, lithium miners are at the nexus of the global EV transformation. 

Uranium continued to outshine other commodities, with U3O8 surging 16.35% and uranium miner stocks climbing 9.11% YTD as of July 31, 2023. The growing embrace of nuclear energy is driving demand and sparking a resurgence in uranium mine operations. The U.S. opened its first new nuclear power facility in 30 years (Georgia Power's Plant Vogtle) and is actively legislating to reduce dependency on Russia's nuclear supply chain.

Given increased electricity demand and the risks posed by climate change, the U.S. power grid desperately needs modernization. There is an immediate need to expand the grid’s capacity, increase its resilience and support its most vulnerable components – the transmission and distribution lines. This is driving the development of energy storage systems and V2G (vehicle-to-grid) technology and is a major copper demand driver. 

In the first half of 2023, the gold bullion price rose by 5.23% despite competition from a euphoric equity market. Even with contrasting approaches, central banks and investment funds became the main players shaping the gold market in the first half of the year. Central bank buying drove demand, and gold is reverting to its historical role as a significant reserve asset as central banks seek to diversify amid geopolitical uncertainties.

Uranium markets rallied in June with the U3O8 uranium spot price adding 2.61%. U3O8 has climbed a healthy 15.95% YTD, while most other commodities have lost ground. Greater focus on the uranium supply-demand gap helped boost uranium mining stocks in June, with junior miners up 18.88%. Positive momentum in reshoring supply chains continues, given looming sanctions on Russian uranium.

Energy transition metals miners posted strong results in June, with uranium mining equities leading the group. The U.S. is entering the early stages of a manufacturing supercycle driven by massive energy transition investment, which includes building a secure and resilient domestic EV battery supply chain. The U.S. and EU are likely to replace China as the primary drivers of future metals demand, as China's two-decades-long commodities dominance has likely crested.

Chemical reactions of fossil-fuel plants release more radiation into the environment than the operation of nuclear energy plants — 10 times more. Most nuclear-industry waste is relatively low in radioactivity, and only a small amount is produced. Estimates put the total waste from a nuclear reactor supplying one person's electricity needs for a year at the size of a standard brick.

The U3O8 uranium spot price gained 1.58% in May,* increasing from US$53.74 to $54.59 per pound as of May 31, 2023. Uranium has posted a healthy 12.99% year-to-date return as of May 31, and continued to show strength and diversification relative to other commodities, which declined 13.16% YTD (as measured by the BCOM Index).

Gold attempted to breakout above $2,050 in early May before drifting lower as the U.S. debt-ceiling drama deepened and the U.S. dollar strengthened. At the same time, global central banks have been accumulating gold at a record pace. This highlights gold's role as a neutral reserve asset that has the potential to mitigate increasing counterparty risks amid escalating geopolitical tensions.

Lithium and lithium miners staged a sharp rebound rally in May and were the positive exception among critical minerals. The sector was weighed down by China's faltering recovery, ongoing global growth concerns and the U.S. debt ceiling drama. China’s dominance in critical minerals poses risks to the West’s manufacturing base and national security, highlighting the need for onshoring and friend-shoring energy transition supply chains.

The gold market continues to be bullish as the probability of a recession rises, regional banking stress resurfaces and the Fed seems determined "get inflation down to 2%, over time". Globally, we are entering a more challenging period featuring subpar economic growth, increasing risks to systematic financial stability, stubbornly high inflation and rising geopolitical risks. Against this backdrop, we believe gold should perform well, even if the U.S. debt ceiling disaster is averted.

The long-term secular growth outlook for energy transition materials got several boosts in April, despite tepid performance for the month. Chile's decision to nationalize its lithium reserves reinforces the metal's role as a global strategic economic asset. M&A activity has heated up in the copper mining sector with lofty bids, including Glencore's $23 billion rejected offer for Teck Resources at a 20% premium.

The U3O8 uranium spot price climbed 6.01% in April, closing the month at $53.74. The U3O8 price reacted positively to China's bullish comments about its ambitious plans to expand its nuclear energy capacity to supply 18% of its electricity needs by 2060, up from 5% today. YTD, the uranium spot price has gained 11.24% as global acceptance of nuclear energy increases and positive momentum builds within the uranium industry.

Commodity prices weakened in March in reaction to financial system stress and recession fears. As deglobalization accelerates, unfettered access to critical minerals is not likely to last. The old system of free and fair access to commodities, including critical minerals, is moving toward one marked by interregional competition, and unstable availability and pricing. China has moved aggressively to acquire critical minerals in the past 20, but we believe the West has near-unmatched capabilities and is a formidable competitor.

The U3O8 uranium spot price fell slightly in March, from $50.85 to $50.70. YTD through 3/31/2023, uranium has gained 4.93%, demonstrating resilience relative to other commodities (down 6.47% as measured by the BCOM Index). Along with other equities, uranium mining stocks fell in March, victims of the selloff following the U.S.'s biggest banking crisis since 2008. Positive headlines on nuclear power restarts continued in March.

In March, gold posted its highest monthly close since July 2020 and rounded out a solid Q1 2023 gain of 7.96%. Gold is now up 21.38% from last autumn's low (9/26/22) following the most aggressive central bank purchases in decades and gold investment flows catalyzed by the U.S. banking crisis. We are very optimistic given that many significant long-term bullish macro factors for gold have become stronger, while some shorter-term cyclical gold bearish factors have faded.

February saw energy transition materials/critical minerals markets correct, but the secular story remains strong. As the global energy transition "arms race" heats up, the drive to secure supply is fast becoming more important than price. All signs indicate the 40-year bond bull market has likely ended and the next great secular bull market in commodities has begun.

Although markets in February saw a reversal of January's positive performance, spot uranium posted a slight gain of 0.20%, outperforming many other asset classes. Uranium miners made headlines with significantly-sized uranium contracts that reflect higher demand for long-term supply commitments. Uranium market fundamentals are the most positive in over a decade and are likely to continue to be the primary performance driver.

Gold fell in February, closing the month at $1,827 in a correction characterized by a stall in buying, but not selling. Since gold's autumn 2022 low of $1,622, global central banks have been buying gold at record rates; more than three times their long-term averages. The current scale of central bank buying is massive — an annualized rate of 1,724 tonnes vs. an average of 512 tonnes over the past decade. Central bank gold purchases as a percentage of global gold demand have also tripled to 34% from their average of 11% over the past several years.

We believe we are in the early stages of an energy transition materials secular bull market and favorable supply-demand dynamics are likely going forward. The upward revision in global growth, the timing effect of the China credit impulse and the surprise ending of China's zero-COVID policy have provided a tailwind for the metals market. For energy transition metals, we see this as a cyclical boost on top of the robust secular demand that is in play.

January was a strong month for uranium markets, with U3O8 uranium spot price posting a 5.05% increase and uranium mining equities gaining 14.65%. Looking ahead, we believe the uranium bull market still has a long way to run. Over the long term, increased demand in the face of an uncertain uranium supply is likely to support a sustained bull market.

Three key themes for uranium markets in 2023: 1) increased emphasis on energy security worldwide; 2) higher conversion/enrichment prices may boost spot uranium prices; and 3) the global energy transition supports the case for nuclear power. Uranium's performance was notably strong in 2022, despite the overall bear market. Although uranium mining equities fared less well, we believe that the positive fundamentals for uranium and nuclear energy are likely to provide support in 2023.

This year’s top 10 list offers Sprott’s thoughts on what will likely drive markets in the coming year and decade, from a macro perspective and the vantage of our asset classes: Precious Metals and Energy Transition Materials. We believe the global clean energy transition will grow more urgent as energy markets continue re-ordering and energy security becomes synonymous with national security. The signposts point to a commodity-intensive, inflationary and capital-intensive decade where energy transition materials and precious metals will become far more valued than in the prior market regime.