The U.S. government launched a proposal on Tuesday seeking $4.3 billion to buy enriched uranium to develop the U.S. uranium industry. The proposal also aims to stimulate the development of enriched uranium in the United States, ensuring that interruptions in Russian uranium supplies do not affect its power production.
The U.S. is seeking to reduce its reliance on Russian imports of uranium and buy more uranium domestically.
The U.S. government launched a proposal on Tuesday seeking $4.3 billion to buy enriched uranium to develop the U.S. uranium industry, according to media reports. The proposal also aims to stimulate the development of enriched uranium in the United States, ensuring that interruptions in Russian uranium supplies do not affect its power production.
Back in March, the Biden administration formally signed an order banning the import of energy from Russia, including crude oil, coal and other energy products. It is worth noting, however, that uranium was not included at the time.
Although the United States has the ability to mine uranium, it relies heavily on Russia. Russian imports of enriched uranium are the third-largest source of U.S. uranium, accounting for 16.5 percent of total U.S. uranium imports in 2020 and 23 percent of the enriched uranium needed for U.S. commercial nuclear reactors.
Uranium producers in Canada could benefit from the U.S. plan, as the country is the world’s second-largest producer of uranium, accounting for 13 percent of global production.
Since March, as the United States has completely blocked Russian oil and gas imports, market participants are optimistic about the rise in uranium prices and uranium mining stocks, betting that Russia may add enriched uranium to the list of prohibited exports. Company Cameco hit an all-time high in April of this year.
However, an oversupply in the spot uranium ore market has put pressure on uranium miners. The U.S. government’s proposed plan to stockpile physical uranium (enriched or otherwise) could help boost the spot uranium market, pushing uranium miners up again.
The market’s reaction was swift and furious. Affected by the news, intraday prices of the entire uranium mining market, especially the Global X Uranium ETF (Global X Uranium ETF) soared as much as 7% on Tuesday, reaching the highest level in a month. Shares of uranium miners including nuclear fuel suppliers Centrus Energy, Cameco and Energy Fuels also rose sharply.
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