What happened
Coming off an unnervingly volatile week, uranium stocks opened Monday on a solid note. Most stocks from the industry surged by double-digit percentages in early morning trading and sustained momentum as the day progressed. Here were some of the top-performing uranium stocks at the close today:
- Uranium Energy (UEC -0.59%): Up 10%.
- Cameco (CCJ -0.14%): Up 6.9%.
- Denison Mines (DNN -1.00%): Up 5%.
Uranium prices are back on their way up again as global interest in nuclear energy continues to grow.
So what
Uranium prices hit 11-year highs of $60.4 per pound earlier in March as the conflict between Russia and Ukraine sent prices of oil and gas shooting through the roof. The sky-high prices of fossil fuels have compelled utilities to turn to cheaper alternative energy sources like nuclear power, generated with uranium fuel.
The market now expects uranium prices to head much higher given the latest news from Eastern Europe.
Image source: Getty Images.
In retaliation to the sanctions imposed on it by the U.S., Russia is now reportedly considering banning the supply of uranium to the U.S., as reported by Russian news agency TASS.
The U.S. derives almost 20% of its electricity from nuclear energy and relies heavily on uranium from Moscow and its allies Kazakhstan and Uzbekistan to power its nuclear reactors.
So far, the nuclear industry in the U.S. is lobbying the White House intensely to not impose any sanction on Russian uranium imports because it could cripple the industry. President Joe Biden has refrained from such sanctions, but the latest report that Russia now plans to stop the supply of uranium to the U.S. has triggered fresh concerns in the industry.
Investors in uranium stocks, though, stand to benefit as any ban from Russia's end would hit uranium supply and send its prices even higher.
Meanwhile, oil and gas prices also jumped sharply this morning to bounce off last week's weakness. That has further fueled fears of higher demand for uranium from the nuclear power industry even as supply could potentially take a hit. And it's not just Russian supply. Barely days ago, the world's largest uranium miners Cameco and Kazatomprom confirmed they'll continue to keep production low.
As it is, the long-term growth story for nuclear is gaining strength rapidly. On Monday, the U.K., for example, said it plans to boost nuclear energy capacity to provide 25% of Britain's needs. Just last week, Belgium delayed its plan to scrap nuclear energy by a decade, from 2025 to 2035.
Now what
After weakening a bit last week, uranium prices rebounded and were trading above $57 per pound, as reported by TradingEconomics.com today. With uranium prices approaching 11-year highs, Russia planning to ban uranium exports to the U.S., and oil and gas prices surging, the market had valid reasons to bid uranium stocks higher today.
And, as has often been the case lately, Uranium Energy stock was the strongest performer yet again today. Investors continued to pump money into the company that recently made an acquisition in Wyoming, a pro-uranium state. The acquisition could potentially turn its fortunes around if uranium prices head higher.
