Uranium stocks rally on Biden's US$4.3bn plan to "wean off Russia supply"

Wed 08 Jun 22, 10:16am (AEDT)
Nuclear reactors in a yellow field
Source: iStock

Key Points

  • The Biden Administration proposes a US$4.3bn plan to move away from Russian uranium imports
  • The Global X Uranium ETF rallied 6% on the news
  • Uranium spot prices inch higher after the recent pullback

Biden eyes shift away from Russian uranium supply

The Biden administration is making a US$4.3bn push for the government to act as a guaranteed buyer of domestic enriched uranium production to wean itself off Russian imports, as Bloomberg reported.

Energy Department officials told Congressional staff that funding is urgently needed, making the case that any interruption with enriched Russian uranium imports could cause disruptions for nuclear energy operations.

The US is the world's largest producer of nuclear power, accounting for roughly 20% of domestic electric output. Russia imports accounted for 23% of the enriched uranium required to power US nuclear reactors in 2020.

The US$4.3bn proposal is easier said than done, as the US has only one commercial enrichment facility in New Mexico. 

A shift away from Russian uranium would most likely see the US turn to allies such as Canada and Australia for uranium feed. 

Uranium ETF rallies on the news

The Global X Uranium ETF rallied 5.98% overnight, a strong move because:

  • Crossed its 200-day moving average

  • Rallied on 116% its 20-day average volume

URA 2022-06-08 08-04-27

The ETFs top holdings include (% of net assets as of June 6, 2022):

  • Cameco (21.99%)

  • Sprott Physical Uranium Trust (7.03%)

  • NAC Kazatomprom (6.03%)

Spot prices bounce back

Uranium does not trade in an open market like most other commodities. So prices can vary among different reporting agencies and brokers.

Spot prices rose US$2.00 or 4% to US$52.50. Fuel brokers EvoMarkets and Numerco reported spot prices around US$51.50.

2022-06-08 09 40 42-Window
Source: TradingEconomics


Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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