Cameco (NYSE:CCJ) Soaring on Growing China Uranium Demand

Since June Cameco (NYSE:CCJ) has soared, as they signed an agreement with China National Nuclear to supply 23 million pounds of uranium concentrate through 2020.

In November they signed a another deal, this time with China Guangdong Nuclear to supply them with 29 million pounds of uranium through 2025.

The companies are making the long-term deals in order to lock in supply as the nuclear energy market has come back in favor, and companies around the world are starting to, or are planning to build, hundreds of nuclear reactors over the next couple of decades to help meet their energy needs.

China's goal is to increase their generating capacity using nuclear power to 5 percent by 2020. At this time nuclear is two percent of their generating capacity.

As for Cameco, they've risen from $21 a share in early July to close Friday at $38.76, gaining $0.51, or 1.33 percent.

Shaw Group (NYSE:SHAW) Lands Nuclear Deal with Toshiba

A number of interesting factors come with the news that Shaw Group (NYSE:SHAW) has landed a major contract with Toshiba Corporation to provide "engineering, procurement and construction services for new Toshiba Advanced Boiling Water Reactor (ABWR) nuclear power plants worldwide."

Canaccord said, "Shares of the other Shaw – the U.S. construction and Infrastructure development company – were up on news that the company and Japanese conglomerate Toshiba Corporation announced an expanded global strategic partnership in the nuclear power space. Under the agreement, Shaw will have certain exclusive opportunities for providing engineering, procurement and construction services for new Toshiba Advanced Boiling Water Reactor (ABWR) nuclear power plants worldwide, except Japan and Vietnam. Shaw immediately will assume the role of engineering, procurement and construction contractor for Nuclear Innovation North America's (NINA) South Texas Project Expansion, which will use ABWR technology for two new nuclear units, as a consortium team member with Toshiba America Nuclear Energy, a U.S.-based Toshiba subsidiary. Shaw will invest $250 million for an ABWR alliance with Toshiba, including a $100 million credit line available to a venture between Toshiba and NRG Energy (NYSE:NRG) that is expanding a nuclear plant in Texas. The credit facility will convert to equity in NINA upon the satisfaction of certain conditions including the project receiving full notice to proceed, which is expected in mid-2012.

This isn't considered a major game-changer for the nuclear and uranium markets, but it shows the scramble by companies to position themselves for the inevitable surge in demand for both.

Shaw's Chairman, President and CEO, J.M. Bernhard Jr., said, "Now with our agreement with Toshiba, Shaw is able to promote not only Westinghouse AP1000(TM), the world's first Generation III+ nuclear technology, but also ABWR, the world's most proven advanced nuclear technology, to our customers."

Shaw closed Tuesday at $32.05, falling $0.39, or 1.20 percent. For them this is a major deal for a long period of time.

Cameco (NYSE:CCJ), USEC (NYSE:USU). Denison (AMEX:DNN), Grab Market's Attention

The nuclear story has been somewhat eclipsed and questioned over the last several months because of the emerging natural gas story and its implications for the industry, but new attention and reminder of China's growing nuclear demand has brought uranium suppliers Cameco (NYSE:CCJ), USEC (NYSE:USU). Denison (AMEX:DNN) into the limelight once again.

Cameco and USEC have attracted options traders, and Denison, along with Cameco, have been upgraded by RBC Capital on the renewed interest in the sector.

The reason nuclear has been overshadowed is there is now uncertainty with the understanding of the enormous supply of natural gas around the world, especially in the U.S., which has changed the energy picture tremendously.

Low-cost natural gas has already caused some nuclear projects to be put on hold, but it's doubtful if the majority of China's nuclear reactors won't continue or start to be built.

That mean uranium prices will continue to go up because Supply of uranium is tight, and China isn't the only country building out nuclear energy.

Even though generally overlooked, Denison and Cameco have still performed strongly since the middle of the summer, while USEC has been pretty much level.

Cameco closed Tuesday at $36.81, gaining $1.07, or 2.99 percent. Denison closed at $2.65, losing $0.15, or 5.36 percent, although they gained that back and more in after hours trading. USEC closed at $5.50, shooting up by $0.32, or 6.18 percent.