The only major uranium-focused ETF jumped for a second straight day today, as the world’s largest uranium producer vowed to cut production by 10% this year.
Kazakhstan said it would lower production of the energy-generating element due to weak price performance last year, which was caused by an excess of global inventory.
Spot uranium prices surged 10% on the news, closing most recently at $24.25 per pound. That marks the highest price level since September. This move to the upside might not just be a temporary blip, either. From Bloomberg:
The announcement from Kazakhstan, the world’s biggest producer, may mark an inflection point for the market, according to Cantor Fitzgerald LP. The cuts could lead to higher prices, according to Ux, a provider of research on the nuclear industry.
“We had given up on expecting Kazakhstan to exercise production restraint as its mines were the lowest cost operators in the world,” Rob Chang, head of metals and mining at Cantor Fitzgerald in Toronto, said in a note. “This news is a definite surprise and may be the inflection point for the uranium space to head higher across the board.”
The Global X Funds (NYSE:URA) was trading at $16.11 per share on Wednesday morning, up $0.51 (+3.27%). Year-to-date, URA has gained 25.17%, versus a 1.35% rise in the benchmark S&P 500 index during the same period.