FX.co ★ Uranium Holds Surge on Fund Buying

Uranium futures in the United States have climbed to $76 per pound, maintaining a 10% rise since June 16th. This increase followed the announcement by the Sprott Physical Uranium Trust regarding its intention to purchase approximately $200 million in physical uranium for a new fund. Notably, the Trust, which is the world's largest uranium fund, secured twice the amount initially indicated in its underwriting deal with Canaccord Genuity. Historically, substantial uranium purchases by Sprott, which typically holds its uranium in the form of yellowcake, have tended to drive up prices due to the limited activity in uranium derivative markets. This development was preceded by a roughly 6% increase in yellowcake prices in May, after the US government expressed its commitment to bolster domestic uranium enrichment capabilities, streamline regulations, expedite reactor licensing, and uphold trade constraints on major nuclear fuel exporters. Additionally, demand has been bolstered by the energy needs of AI datacenters. Concurrently, leading miner Kazatomprom announced it would reach a mid-point production target of 14 million pounds, representing a nearly 20% decline from its forecast provided in late 2023.