Each Friday, corporate advisory firm Barclay Pearce highlights the key trading themes of the week, along with which companies and sectors Stockhead readers should be keeping their eye on.

Uranium stocks moved back on the investor radar last month, with a couple of ASX plays booking big gains in May.

And in this week’s interview, Barclay’s Head of Trading Trent Primmer flagged it as a sector to watch within his broader commodities thesis.

Market mechanics

Spot prices for uranium edged above US$30/pound this week — a 10-month high — after trading in a range between US$25-30/pound through the first half of this year.

At those prices, the economics still don’t stack up for a lot of junior uranium producers so further catalysts will be required for longer-term growth.

Assessing the recent price action, Primmer said uranium prices have remained in a state of flux for the past decade since the Fukushima disaster in Japan.

In the fallout from that event, global uranium demand fell while supply inventories rose steadily.

Speaking on the StockheadTV RockTalks panel earlier this week, Bannerman Resources (ASX:BMN) CEO Brandon Munro noted that global uranium demand now exceeds pre-Fukushima levels, except supply stocks are still in the process of recalibrating.

Munro also flagged the recent activity in secondary demand markets, such as buy-and-hold strategies for physical uranium.

In late April, global asset manager Sprott Holdings entered the market with its acquisition of Uranium Participation Corp and the launch of the Sprott Physical Uranium Trust.

Munro said he expects the move to have a “big impact” with a “dramatic increase in liquidity”.

Uranium opportunities

BMN is one of the ASX uranium stocks that Primmer highlighted in his appraisal of the market.

“Their share price seems to have the highest leverage to physical uranium prices, and they’ve been a strong performer with the largest market cap in the ASX uranium sector,” Primmer said.

Primmer also highlighted Energy Resources (ASX:ERA) and Deep Yellow (ASX:DYL) as two other uranium stocks on his watchlist.

“With these plays I’d be using any price weakness to accrue small positions,” Primmer said.

He added that along with the shifting dynamics around global supply and demand, uranium is also included as part of the broader focus on clean energy as well.

“It (uranium) is a thematic that’s going to be sticking around over the next several months — there’s a lot of market chatter around it,” Primmer said.

“If you can get in early on the upswing, I’d be watching these stocks and if they come off 15-20% I’d be buying some small parcels just to get exposure to the underlaying commodity.”

The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.