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%.

| More on:
A businesswoman pulls her glasses down in shock to look at the bad news on her computer.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

More on Energy Shares

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Energy Shares

Why is the Beach Energy share price racing higher on Thursday?

This energy producer delivered some big news this afternoon.

Read more »

A person is weighed down by a huge stack of coins, they have received a big dividend payout.
Energy Shares

Own Ampol shares? Get ready for your monster dividend payment

Ampol investors are about to enjoy their largest-ever dividend.

Read more »

A man sees some good news on his phone and gives a little cheer.
Energy Shares

Buy Woodside shares for a 20% gain and 4.5% dividend yield

Morgans thinks investors could get big returns from this energy giant.

Read more »

Woman holding $50 notes and smiling.
Dividend Investing

A 36% yield from this ASX dividend share? Here's how these forward-looking investors made it happen

Some savvy passive income investors are earning a 36% yield from this ASX dividend star.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

Read more »

Happy coal miner.
Energy Shares

How these ASX 200 energy shares could unexpectedly burn brighter

ASX 200 energy shares are facing rising global demand for their products.

Read more »

Worker inspecting oil and gas pipeline.
Energy Shares

ASX energy shares losing charge amid fresh warnings of gas supply shortfalls

Many energy commodity prices fell overnight and this is hitting ASX energy shares today.

Read more »

A miner stands in front oh an excavator at a mine site
Energy Shares

'We have reached a bottom': 5 ASX uranium shares leaping higher this week

ASX uranium stocks have enjoyed explosive share price growth over the past year.

Read more »