Russia Suspends Uranium Exports to US: Market Impact on Nuclear Stocks

Source: Chris Temple 11/18/2024

Chris Temple of The National Investor shares his thoughts after Russia announced that it was going to start suspending shipments of enriched uranium to the U.S.

As I sent out over the weekend, Russia announced that it was going to start suspending shipments of enriched uranium to the U.S.

This really shouldn’t be a surprise in one sense: many of us warned back in the spring (as you see below, via a John Quakes post) that the action back then by the U.S. government to announce we wouldn’t buy any more starting in 2028 might evoke this response.

I’ll be covering this and all things uranium in a special update on the sector/our uranium-focused companies shortly. At first blush, the timing quite possibly involves President Putin seeking some leverage in what will be blunt upcoming dealings with President Trump. Fair enough.

But things took a more ominous turn yesterday when President Biden decided, as he’s on his way out the door, to relent and allow Ukraine to use long-range U.S. missile batteries after all against Russia. As I sent out last night, this has greatly heightened the odds that what has seemed to be a coming end to that war could now quickly go the other way to something far more ominous. And it seems as if some markets are paying some attention.

We never want to make sudden, wholesale moves only to get whipsawed if an apparent trend doesn’t materialize. Nonetheless, I do feel it best to advise some tweaking of our overall portfolio mix:

First, just SELL DUST. It was a good idea if nature was going to continue taking its course on interest rates and the dollar and take gold down to at least the first of those target areas I discussed.

But there are more reasons now why gold will be supported, I think, than not given this new dynamic, and gold has popped a bit overnight despite Treasury yields creeping back toward the 4.5% area once more. Make sure you top up allocations to UNG and BOIL as follows:

Growth accounts — 3% UNG, 2% BOIL

Conservative accounts — 3% UNG

Lastly, all our uranium-focused ETFs are a Buy, as are Uranium Energy Corp. (UEC:NYSE AMERICAN) and Energy Fuels Inc. (EFR:TSX; UUUU:NYSE.American): This is as the uranium price popped $4/pound on the Russia embargo news last Friday (see THIS REUTERS STORY for some of the details.)

Thus far, the broad stock market (what else is new?) seems oblivious to all of this, though that might change with little notice. So, stay tuned as we might get either more defensive-weighted still . . . load up more on certain things such as above . . . or both.

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