Uranium ETF is Looking Hot
January 21st at 1:47pm by Max Chen
With Japan planning to restart its nuclear power facilities after the Fukushima disaster, uranium stocks, along with the related exchange traded fund, are heating up.
The Global X Uranium ETF (NYSEArca: URA) gained 4.4% Tuesday on volume that is already more than six times the daily average. The ETF is up 6.1% over the past week and up 10.4% over the last month. URA also moved above its 200-day simple moving average.
Within the sector, Uranerz Energy Corp (NYSE: URZ) surged 8.5% Tuesday, Denison Mines Corp (NYSE: DNN) gained 7.6% and Uranium Energy Corp. (NYSE: UEC) rose 4.8%. Global X’s URA has a 10.2% weight in DNN, 5.5% in UEC and 3.7% in URZ.
Japan is set to restart some of its 50 shuttered nuclear plants later this year, reports Gary Lamphier for Edmonton Journal. The plants were closed in 2011 following the earthquake and tsunami that damaged the Fukushima power plant.
Last Wednesday, Japan’s trade ministry approved a 10-year business plan for Tokyo Electric Power Company, the owner of the Fukushima Daiichi nuclear plant, reports Ari Phillips for ThinkProgress.
Prime Minister Shinzo Abe has been a large proponent of nuclear energy, arguing that it is necessary for powering Japan’s economy – the country has been importing 84% of its energy requirements without support from nuclear energy.
On the supply side, a series of operating problems has shut down producers in Australia, Nambia and Niger, which combined affect about 15% of global supplies.
Moreover, a deal between the U.S. and Russia on recycling uranium from Soviet-era nuclear weapons is set to expire, removing around 24 million pounds of the metal from the market.
“Demand continues to rise at about three per cent a year,” David Sadowski of Raymond James Ltd., said in the Edmonton Journal. “Down the road, we’re looking at a supply shortfall because supply just can’t rise at that rate. So that’s really been our underlying thesis.”
Global X Uranium ETF
For more information on the uranium industry, visit our uranium category.