What’s going wrong for ASX uranium shares on Wednesday?

After a multi-year lull, the spot price of uranium started to gain traction in 2021 but, since reaching a notable high in April, the commodity’s value has slumped around 20%.

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Key points

  • ASX uranium shares are struggling on Wednesday for no obvious reason
  • Interestingly, the price of uranium has lifted slightly over the last few days. Though, it's still notably lower than it was earlier this year
  • On top of that, Wednesday brought good news of a major Australian uranium project

It’s a rough day on the market for most ASX uranium shares despite seemingly good news for the industry. In fact, there’s no clear reason behind uranium stocks’ underperformance today.

The price of the nuclear-necessity seems to be on a slight upwards trend – though it’s still significantly lower than it was five weeks ago. Additionally, a major South Australian uranium project was finally given the green light after being put on the back burner years ago.

Let’s take a closer look at what might be weighing on ASX uranium shares.

What’s weighing ASX uranium shares down?

ASX uranium shares are having a rough trot today alongside many of their peers.

In fact, the S&P/ASX 200 Materials Index (ASX: XMJ) is currently down 0.64%, with lithium miners among its worst performers. At the same time, the S&P/ASX 200 Energy Index (ASX: XEJ) has slumped 0.14%. For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.1%.

Meanwhile, the share prices of uranium producers Paladin Energy Ltd (ASX: PDN), Deep Yellow Limited (ASX: DYL), and Bannerman Energy Ltd (ASX: BMN) are down 8.18%, 5.96%, and 8.7%, respectively.

Interestingly, Boss Energy Ltd (ASX: BOE) is also 5.7% lower, despite good news out of its Honeymoon uranium project.

The company announced work at the project will restart this morning after being put on ice in 2013 amid untenable uranium prices.

Speaking of uranium prices, after a multi-year lull, the spot price of uranium started to gain traction in 2021 but, since reaching a notable high in April, the commodity’s value has slumped around 20%. Though, it has gained around 4% since this time last week.

Thus, ASX uranium shares could be slipping in response to the commodity’s strung-out tumble.

Additionally, the world’s largest physical uranium fund, the Sprott Physical Uranium Trust, has fallen 9% over the last 30 days.

It’s worth noting that, today’s falls included, all mentioned ASX uranium shares except for Deep Yellow have fallen relatively in line with the trust over that time.

They’ve each slipped between 8% and 10% over the last month. Meanwhile, Deep Yellow’s stock has dumped 19%.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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