Uranium stocks jumped in the early US cash session after Russian President Vladimir Putin instructed the government to review possible measures to restrict exports of strategic raw materials, such as nickel, titanium, and uranium, in retaliation for Western sanctions.
"Russia is the leader in reserves of a number of strategic raw materials, namely natural gas that is nearly 22% of the world's reserves, gold at nearly 23%, and diamonds at nearly 55%. Mikhail Vladimirovich [Prime Minister Mishustin], I have a request for you to look, please, at some types of goods that we supply in large quantities to the world market. Supplies of a number of goods are limited to us, but maybe we should also think about certain restrictions; uranium, titanium, nickel. Just do not do anything to our detriment," Putin told several cabinet ministers on Wednesday, as the Russian news agency Interfax reported.
Putin said, "Strategic reserves are being created in some countries, and some other measures are being taken," adding, "In general, if this will not harm us, then we could think - I am not saying that we need to do this tomorrow - think about certain restrictions on deliveries to the foreign market, not only of the goods that I have named, but also of some others."
The US, UK, and EU unleashed a barrage of financial, economic, military, and energy sanctions on Russia shortly after it invaded Ukraine. Washington and Brussels were attempting to cripple Russia's economy or its war effort, yet that turned out to be a failure since China stepped up as a major commodity buyer.
Meanwhile, the Kremlin has transitioned its economy into a full-blown war economy. Putin has boosted the nation's military budget by 70% this year, a post-Soviet record of over $100 billion.
Due to failed Western sanctions, the US and Europe must face the genuine risk of trade restrictions by Moscow pushing prices of nickel, palladium, and uranium higher. This comes as Western central banks are fighting the inflation monster, sparked by their own doing.
In markets, uranium stocks, such as CCJ, UEC, URA, and URNM, jumped between 5% and 7%.
In addition to fears of Russia reducing or entirely cutting uranium exports, Kazatomprom, the world's largest uranium producer, announced last month that it would cut its 2025 production forecast due to mounting supply chain woes.
We suspect uranium prices are set to jump once again...
A tight uranium supply theme rolling into 2025 could pressure prices even higher.
