The list of commodities that will not be imported from Russia, published by the US government, does not include uranium, at least for the moment. However, according to information from the US President's entourage, the White House will consider imposing sanctions on Rosatom, which accounts for about 35% of the world's enriched uranium and supplies fuel to European nuclear reactors. Rosatom also cooperates with Iran. Iran develops its nuclear programme for several years, while the US wants to control this process. The Biden administration is currently in the consultation stage with nuclear experts. Further moves could have a key impact on the industry and uranium producers.
In 2020, nearly 17% of uranium imported into the US came from Russia, and nearly half of the nuclear fuel in US reactors were imported from Russian allies, mainly Kazakhstan. Enriched uranium is essential to the operation of nuclear reactors, whose fuel stocks are replenished every 1.5 years or so, so that energy suppliers usually buy uranium well in advance. This gives hope for uninterrupted operation of US nuclear power plants at least in the near future.
A ban on Russian uranium imports could bring significant benefits to mining companies such as Uranium Energy Corp (UEC.US), Cameco (CCJ.US) and Energy Fuels (UUUU.US). No wonder then that recently the organization of US uranium producers 'Uranium Producers of America' called on Biden to impose an embargo on Russian commodities with simultaneous protests from the US nuclear industry. The problem lies in the fact that uranium mined in Russia and neighboring countries like Kazakhstan is the cheapest and there is no price competition for it.
At the same time, American uranium deposits are not exploited to a sufficient extent. Reaction of Kazakhstan's Kazatomprom (KAZ.UK), the world's largest producer of uranium is still uncertain, although there is speculation that Russians may put pressure on the company and limit exports to the 'West'.
Pressure to resume and accelerate 'domestic' uranium production is now evident in the US. Several companies have already indicated that they are willing to resume mining in Wyoming and Texas provided they receive long-term contracts. The National Energy Institute (NEI) expressed its support for the development of the US uranium industry.
"US energy companies are signing fuel supply agreements with a network of companies and countries around the world to reduce the risk of potential disruptions," - Nima Ashkeboussi, director of fuel and radiation safety at NEI, said.
Recent turmoil in the uranium market had a positive impact on the stock prices of Western uranium producers, such as Uranium Energy Corp and Energy Fuels, which are hoping to receive government support to resume large-scale operations in the US.
Uranium Energy Corp (UEC.US) stock jumped over 120% since the Russian attack on Ukraine commenced. Yesterday buyers managed to keep the price above the local support at $4.45, which coincides with 23.6% Fibonacci retracement of the upward wave launched at the beginning of 2020. Currently price is heading towards resistance at $5.75 where November 2021 highs are located. Source: xStation5
