What happened
From established uranium industry veterans to development-stage players, stocks across the niche headed for the sky Thursday morning. Here's how the top-performing uranium stocks had surged as of 10:20 a.m. ET.
- Uranium Energy (UEC -1.78%): Up 8.4%.
- Denison Mines (DNN -1.00%): Up 8.9%.
- NexGen Energy (NXE): Up 8.1%.
Shares of Cameco (CCJ 0.16%) were 7.3% higher as well. That's notable as Cameco is a relatively less volatile stock, given that it's already one of the world's largest uranium miners. Among the other publicly listed uranium stocks in the U.S., most are still in the early stages of exploration and development.
Nothing drives commodity stocks as much as commodity prices, and that pretty much sums up why uranium stocks were rising.
So what
Uranium prices have surged since Russia invaded Ukraine in late February, an event that further disrupted an already-imbalanced fossil fuel market and pushed high oil and natural gas prices even higher. This latest rally in fossil fuels was so strong and quick that it has induced a number of nations to head back to the drawing board when it comes to their energy policies. Many are now planning to pivot toward alternative energy sources with even greater vigor. And for some, that will mean a large role for nuclear energy, which is generated from reactors powered by uranium.
Image source: Getty Images.
According to TradingEconomics.com, on Thursday, uranium prices broke their previous 11-year record, set last month, and surged to $61.60 per pound.The commodity is now trading at its highest level since the Fukushima Daiichi nuclear disaster in 2011, an event that reversed the fortunes of the uranium industry and closed the door on its growth.
The U.S. generates nearly 20% of its electricity from nuclear reactors, and to power them, it relies heavily on imports of cheap uranium from Russia and its allies Kazakhstan and Uzbekistan. So far, President Joe Biden has not imposed sanctions or bans on uranium imports from Russia, and the domestic nuclear industry has lobbied intensely in Washington for the government to refrain from doing so. But bills to ban uranium imports from Russia have in recent weeks been introduced in both the House and the Senate. Should those bills or White House action eventually result in sanctions or a ban, that would cut into already tight uranium supplies. Meanwhile, Russia is reportedly considering its own ban on exporting uranium to the U.S.
Now what
Uranium Energy has emerged as the hottest uranium stock on the market recently, having gained almost 76% in just the past seven weeks or so.
Its stock could be benefiting from another company-specific tailwind now: Its latest regulatory filing revealed substantial uranium deposits at the key assets the company acquired when it purchased Uranium One in December. Among the class of young uranium miners, Uranium Energy could be the closest to actually producing and selling the commodity, which is why investor interest in the stock seems to be rising steadily.
