Why Paladin Energy, Boss Energy and Deep Yellow are set to rally on Tuesday
The Global X Uranium ETF rallied 9.3% overnight after a US-UK nuclear partnership announcement. Here's what you need to know.
Source: iStock
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KEY POINTS
- Global uranium stocks surged to 12-year highs with the Global X Uranium ETF gaining 9.3% after US-UK nuclear partnership announcement and confirmation of American uranium stockpiling plans.
- New licensing agreement between US and UK will cut nuclear project approval time from 3-4 years to two years, with over £50 billion in commercial deals announced including 12 advanced modular reactors.
- Boss Energy and Paladin Energy are the most heavily shorted ASX stocks with 18.9% and 16.8% short interest respectively, creating potential for amplified gains from short covering.
Global uranium equities rallied to levels not seen since September 2012 overnight, driven by major announcements around US-UK nuclear cooperation and confirmation that America is looking to boost its uranium stockpiles.
The Global X Uranium ETF gained 9.3% overnight, with broad-based gains from names including Cameco (+10.5%) as well as Energy Fuels (+15.8%), Uranium Energy Corp (+10.9%) and Denison Mines (+8.8%).
Global X Uranium chart (Source: TradingView)
Uranium stocks climb on UK-US nuclear deal
The catalyst came from news that the US and UK will sign an agreement to accelerate nuclear power station approvals during President Trump's state visit. The partnership will allow both countries to use each other's safety assessments, cutting licensing time from 3-4 years down to just two years.
Key commercial developments include:
Centrica partnering with X-energy to build up to 12 advanced modular reactors in Hartlepool, UK
Potential creation of 2,500 jobs in northeast England
Combined deal values exceeding £50 billion (US$68 billion)
Holtec and EDF developing data centres powered by small modular reactors in Nottinghamshire
In parallel, US Energy Secretary Chris Wright signalled plans to increase the national strategic uranium stockpile.
ASX uranium stocks set to rise
The overnight rally provides a strong lead in for ASX-listed uranium stocks.
However, the sector's largest names like Paladin Energy and Boss Energy have dramatically underperformed the broader sector amid several operational setbacks.
This has driven a surge in bearish bets against the two names. Boss Energy is the market's most shorted stock, with 18.9% short interest, while Paladin Energy is the third most shorted stock, with 16.8% short interest. Despite overwhelming bearish sentiment towards the sector, the overnight move is likely to trigger some short covering in local names.
Local uranium names had a mixed session on Monday, with varying year-to-date returns.
Ticker | Company | Price | % Chg | YTD |
|---|---|---|---|---|
BOE | Boss Energy | $1.85 | 7.8% | -24.0% |
DYL | Deep Yellow | $1.91 | 2.4% | 70.8% |
PDN | Paladin Energy | $7.88 | 1.8% | 3.8% |
EL8 | Elevate Uranium | $0.30 | 1.7% | 11.3% |
HAV | Havilah Resources | $0.19 | 0.0% | -17.7% |
BMN | Bannerman Energy | $3.36 | -1.4% | 18.7% |
NXG | Nexgen Energy | $11.55 | -2.2% | 6.8% |
LOT | Lotus Resources | $0.18 | -2.7% | -12.5% |
Uranium sector performance as at Monday, 15 September close
The bottom line
The uranium sector's fundamental outlook remains compelling, driven by its role in energy reliability and decarbonisation. However, the journey for ASX-listed names has been volatile, marked by opaque and volatile uranium pricing, operational setbacks and uncertain supply dynamics.
While global uranium stocks are gaining significant momentum, ASX-listed names have struggled, largely reflecting challenges for major producers Paladin Energy and Boss Energy. Despite this underperformance, today's developments represent another bullish catalyst for the industry.
