Uranium miners and related exchange traded fund are heating up on hopes Donald Trump’s administration will be more nuclear friendly.
The Global X Uranium ETF (NYSEArca: URA), which tracks uranium miners, surged 6.8% on Tuesday, along with the broader rally in the materials sector, after rising 35% so far this month.
The uranium miners segment’s recent strength is being supported by optimism over Trump’s administration.
In an interview with Canada’s BNN network, Cameco CEO Tim Gitzel said that “we’ve heard some encouraging words from the Trump team on nuclear power. We’re optimistic that will help our nuclear industry,” reports Paul R. La Monica for CNN Money.
Cameco (NYSE: CCJ) is the largest component hold in URA’s portfolio, comprising 21.1% of the ETF’s underlying weight.
While Trump has not said much about investing in nuclear power since the election, many observers view Trump as a boon for the industry ahead, especially with the administration revealing a looser stance on regulation. Trump could soften environmental regulations and pull back government support for incentives in alternatives like wind and solar.
Trump previously tweeted that “the United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes.”
Investors are also betting that Trump is more nuclear friendly partly due due to comments the president made after the meltdown at Japan’s Fukushima Daiichi plant in March 2011.
“I’m in favor of nuclear energy, very strongly in favor of nuclear energy,” Trump previously said in an appearance on Fox News. “If a plane goes down people keep flying. If you get into an auto crash people keep driving.”
Member’s of Trump’s transition team have even reached out to the Energy Department to find ways to help keep nuclear power plants running under his administration.
Even without Trumps approval, nuclear reactor growth is expected to more than offset reactor closures between now and 2025, with the vast majority of the new reactors expected to come online from Asia where demand for power is still rapidly expanding, Reuben Gregg Brewer writes for Pantagraph.
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