Uranium stocks rally on Biden's US$4.3bn plan to "wean off Russia supply"
Uranium stocks are up 2-10% after Biden's plan to bolster domestic enriched uranium production
Source: iStock
Mentioned
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
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.
Source: TradingEconomics
