Antinuclear

Uranium stocks dumped as market ‘paralysis’ intensifies

The ASX’s beaten-up uranium sector is braced for a fresh blow from US President Donald Trump’s next round of tariffs, which threaten to dislocate physical markets and further delay a hotly anticipated bull run.

The sell-off is feeding into the hands of hedge funds, which are heavily shorting the industry in Australia, including about a quarter of the shares outstanding on Boss Energy.

Traders have been preparing for Trump’s 10 per cent tariff on Canadian energy exports to kick in tonight (Thursday AEDT) as part of his so-called Liberation Day. Despite the president initially threatening 25 per cent tariffs on Canadian uranium, the levies are still expected to rock the physical market, given the US is the world’s largest uranium buyer.

The anxiety accelerated a sell-off in ASX uranium stocks on Wednesday that sent Paladin Energy plunging 3.3 per cent to $4.66. Boss Energy fell 3.4 per cent to $2.30 and Peninsula Energy 5.9 per cent to 63.5¢.

Prices of the nuclear fuel have already collapsed 40 per cent from a 16-year-high above $US106 a pound last year to now sit at $US64.25 a pound.

And uncertainty about the scope and duration of Trump’s coming levies has intensified concerns about demand for the metal, given US nuclear power plants rely on Canada for more than a quarter of their uranium requirements – more than any other source, according to Bloomberg.

That has caused US utilities – nuclear power plant operators that are the primary buyers of uranium – to halt purchases of the nuclear fuel, sparking concerns that they will eventually run out of inventory……………………………………….

Uranium stocks have been under fire since January when reports emerged that Chinese artificial intelligence disruptor DeepSeek was developed at a fraction of the cost and computing power of OpenAI’s equivalent model.

Investors were concerned that if AI became more efficient, it would reduce overall power consumption and therefore demand for uranium – a key ingredient in nuclear reactors being developed by tech giants such as Google, Meta and Amazon.

That price weakness has attracted the attention of hedge funds, and the ASX’s largest uranium producers – Boss Energy and Paladin Energy – are the most shorted stocks in Australia.……………………………………

Uranium stocks went on a tear in late 2023 and early last year amid concerns about supply shortages and renewed demand from Western countries turning to the energy source to meet their net zero commitments.

That dynamic led to a flood of bets that the uranium sector would be stuck in a deficit for years to come, which would boost prices………………………………………https://www.afr.com/markets/commodities/uranium-stocks-dumped-as-trump-fears-intensify-market-paralysis-20250402-p5lofe

April 8, 2025 - Posted by Christina Macpherson | Uncategorized