Uranium Regains Some Glow as Trump Sidesteps Fight

Uranium prices jumped to a four-month high after President Trump held back from imposing limits on U.S. imports of the nuclear fuel, saying he didn’t regard it a national security risk.

The global uranium trade ground to a virtual standstill in recent months as utilities in the U.S., which account for roughly a quarter of demand world-wide, feared the commodity would be swept up in Mr. Trump’s trade offensive.

In April, Commerce Secretary Wilbur Ross told Mr. Trump that America’s reliance on uranium imports—much of which come from Russia, Kazakhstan and Uzbekistan—was a threat to national security. Rising output elsewhere in the world was also making it difficult for U.S. miners to compete, according to Mr. Ross. That followed a petition, including a request for a cap on imports, by two U.S. uranium producers under the same national-security law invoked for the steel and aluminum tariffs.

But on Friday, Mr. Trump said he didn’t agree.

Uranium is traded in a global but opaque market where most sales are agreed through privately negotiated spot and term contracts. According to UxC LLC, a nuclear-fuel research firm that publishes weekly market prices, the price of U3O8, a common uranium compound used mainly in nuclear-power generation, rose this week to its highest level since March, settling at $26.10 a pound on Wednesday.

Shares in

Yellow Cake

PLC, a London-listed uranium investor, have also climbed since the beginning of the week, while shares in U.S. uranium miners Ur-Energy Inc. and

Energy Fuels
Inc.,

who led the petition, sank more than 30% on Friday. Both rebounded slightly this week.

“It does appear that the president’s announcement has broken the logjam in the market,” said Jonathan Hinze, president of UxC. “Prices could rebound now.”

Strong buying demand quickly emerged after Mr. Trump’s decision, and there are signs sellers are holding back supplies on expectations prices will rise even further, he said.

Uranium prices have weakened from roughly $29 a pound at the start of the year amid the hiatus and remain well below the $70 a pound the commodity fetched in early 2011 before Japan’s Fukushima nuclear disaster.

While Mr. Trump held back from immediate import restrictions, he did announce a group that will within 90 days draw up recommendations for reviving and expanding U.S. nuclear-fuel production. He noted the U.S., which relies on nuclear energy for about one-fifth of its electricity generation, needs locally produced uranium for military purposes.

The U.S. imports roughly 93% of its commercial uranium needs, up from 86% in 2009, government data show.

Some unease in the international market is likely to remain until those proposed measures are known, according to Canadian uranium producer Cameco Corp., which added miners around the world continue to face challenges.

In Japan, nuclear energy output remains subdued following Fukushima, while an expansion of China’s nuclear fleet has been slower than anticipated. Across Europe, utilities are shutting reactors.

“Of course, a rapid increase in price is also not very likely given continued weakness in the underlying fundamentals,” said UxC’s Mr. Hinze. He noted large stockpiles built over several years of lackluster demand and projections of low global demand growth in the near-to-medium term.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

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