The Paladin Energy Ltd (ASX: PDN) share price is booming on Wednesday, up 8.8% to 80 cents.
What's driving the Paladin Energy share price?
Uranium ETFs boom overnight
The Global X Uranium Exchange Traded Fund (ETF) surged 11.65% to US$26.92, just 6% away from its mid-September all-time highs of $28.72.
This move comes off the back of its highest volume day in history, with over 6.1 million shares traded.
The uranium ETF is comprised of companies involved in uranium mining and the production of nuclear components, including those used for extraction, refining and exploration.
The ETF holds positions in ASX-listed uranium players including Paladin Energy and a handful of explorers including Bannerman Energy Ltd (ASX: BMN) and Boss Energy Ltd (ASX: BOE).
Tailwinds for uranium demand
According to Bloomberg, uranium "may extend this year's uptrend as worsening power shortages bolster its allure as a potential alternative to fossil fuels".
Uranium prices have cooled off to around US$40/lb after surging to a 9-year high of ~US$50/lb on 17 September.
Similarly, the Paladin Energy share price boomed from the mid-40 cent range in mid-August to a 9-year high of $1.12 on 16 September.
Bloomberg said that "more uranium producers and developers are seeking to build inventories and reactors with Bloomberg New Energy Finance (NEF) forecasting Asia will take the lead".
"Inflows into uranium exchange-traded funds remain elevated and Asian miners look primed to benefit," it added.
Hedge funds join the party
The Australian Financial Review (AFR) also reported that funds such as Ben Melkman's New York-based Light Sky Macro, Anchorage Capital and Tribeca Investment Partners are bullish on the outlook for the energy metal.
How has the Paladin Energy share price performed?
The Paladin Energy share price is up 237% year-to-date thanks to the resurgence of uranium spot prices.
Its shares have pulled back sharply from mid-September highs of $1.12 but managed to consolidate around the low 70 cent range.
