The Global X Uranium ETF (NYSEArca: URA), which tracks global uranium miners, continues scuffling, but there could be political help emerging for the fund.
URA targets the Solactive Global Uranium & Nuclear Components Total Return Index. The ETF’s components include companies engaged “in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries,” according to Global X.
“Republican U.S. lawmakers this week urged President Donald Trump’s administration to ease restrictions on uranium mining on federal lands, as a Cabinet-level committee prepares recommendations this month for boosting domestic nuclear fuel production,” reports Bloomberg.
Cuts In The Uranium Market
The uranium market has been supported by significant production cuts, reductions in producer inventories and an increase in demand. Investors may be looking at the battered uranium miner space as a value play, given the improved strength in the sector.
“Trump created the United States Nuclear Fuel Working Group in July to help U.S. uranium miners and nuclear industry struggling with foreign competition after he rejected a section 232 trade petition by two companies seeking quotas for domestic production. The group has met several times since its formation and is expected to detail its proposals by an Oct. 10 deadline,” according to Bloomberg.
Additionally, the industry may enjoy greater Chinese demand in the years ahead. The China National Nuclear Corp is investing in overseas uranium mines to secure supply for an expected power-up of China’s nuclear power generation, Reuters reported.
Policymakers are pushing the White House to lift mining restrictions in some uranium-rich areas of the U.S. and to expedite the permitting process.
“The lawmakers, including Alaskan Senate Energy Committee Chair Lisa Murkowski, said the group should lift access restrictions on uranium-rich areas of the country and expedite environmental reviews for mining projects – proposals that the Commerce Department had outlined when it named uranium a critical mineral in June,” according to Bloomberg.
Investors have pulled nearly $60 million from URA this year.
For more information on the uranium miners segment, visit our uranium category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.