Trump's nuclear energy orders would boost uranium prices, investments, experts say
May 27 (Reuters) - President Donald Trump's latest orders seeking to revitalize the U.S. nuclear energy industry could pull the uranium market out of its current lull and boost investor interest, industry experts said.
Spot uranium prices have fallen about 30% from peaks hit in 2023 as institutional investors pulled out, spooked by recession fears and geopolitical instability.
The prices briefly declined to $64.30 per pound this year after they touched a 14-year high of $82 in February last year amid a global clean energy push and expectations of tight supply.
But the latest executive orders, signed on Friday, could reinvigorate uranium production in the U.S. to help meet surging power demand, industry insiders said.
The demand surge is primarily driven by data centers that require massive energy to power the AI boom, and nuclear energy is an attractive option for Big tech firms such as Amazon, Google, Microsoft and Meta given its reliability and near-zero carbon footprint.
Nuclear projects, however, have been facing rising costs and competition from natural gas plants. Vogtle, the last U.S. reactor to come online, was $16 billion over budget and delayed by several years.
Curtis Moore, senior vice president at Energy Fuels, said the current weakness in uranium has made it difficult to advance new domestic projects, given a lack of investor interest - a sentiment echoed by other firms in the sector.
Stocks of Major uranium-linked companies Energy Fuels (UUUU.A), opens new tab, Uranium Energy Corp (UEC.A), opens new tab and Encore Energy (EU.O), opens new tab plunged 13%, 23% and 53%, respectively, this year.
Their shares rose between 17% and 23% on Friday after the orders were signed.
"(The orders) will provide further confidence that the Federal funds already earmarked to support the domestic nuclear fuel supply chain (will) get deployed quickly which in turn should attract more private investment," said Nick Amicucci of Evercore ISI.
Analysts see further upside, with incentive prices for new uranium production estimated above $100/lb.
"Even before the AI boom and SMR (Small Modular Reactors) hype, the uranium outlook was strong," said Robert Crayfourd from Geiger Counter.
Spot uranium prices are currently around $70/lb, with term contracts trending around $80/lb.
"(The decision) paves the way for renewed contracting and long-term supply confidence," said Marco Mencini, head of research, Plenisfer Investments.
Currently, U.S. utilities hold less than two years of inventory, with contracting down 40% in 2024.
The executive orders include a directive for fast-tracking licenses for new reactors, which would in turn boost contracting by utilities.
"This is essentially a wartime defense measure," said Justus Parmar of Fortuna Investments. "We produce only 1 million pounds of uranium annually against a consumption of 50 million pounds. Nuclear energy is no longer optional - it's essential."
Industry insiders expect the policy to accelerate deployment of small modular reactors, encourage capital inflows and support reactor life extensions.
Travis McPherson of NexGen Energy forecasts "a mad rush to secure uranium sources."
"It will be like musical chairs where many will be left standing without a chair."
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