The uranium sector-specific exchange traded fund has been rallying as traders put the Fukushima disaster behind them, a potentially pro-nuclear U.S. president takes office and now increased demand coming from Iran all helped lift uranium prices from their lowest in over a decade.
The Global X Uranium ETF (NYSEArca: URA), which tracks uranium miners, surged 8.5% on Tuesday after rising 11.7% so far this month.
Uranium miners have been strengthening on rising uranium prices after the rare earth metal slipped to $18.0 per pound in November, its lowest since 2004, and now trades at around $20.25 per pound.
Uranium prices and miners jumped Tuesday after U.S. and five other permanent United Nations Security Council members backed plans for Iran to receive a 116 metric tons of natural uranium, with a huge shipment of natural uranium from Russia.
The uranium market has also been steadily strengthening as negative sentiment surrounding the 2011 Fukushima disaster in Japan reverse. Japan has been paving way for its nuclear power plants to restart operations. Japanese Prime Minister Shinzo Abe has also been a vocal nuclear power proponent, arguing that atomic power, which contributed to almost one-third of Japan’s electricity pre-Fukushima, helps diminish the country’s reliance on expensive fossil fuel imports. The argument may be gaining momentum especially as crude oil prices rebound.