Why are ASX uranium shares going gangbusters today?

These shares aren't being held back by the market sell-off.

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The market may be crashing on Wednesday, but not all shares are falling with it.

In fact, one group of shares is catching the eye with some very strong gains – ASX uranium shares.

Let's take a look at how some of these stocks are performing at lunch today:

  • The Bannerman Energy Ltd (ASX: BMN) share price is up 5% to $3.99.
  • The Boss Energy Ltd (ASX: BOE) share price is up 4.5% to $5.17.
  • The Deep Yellow Limited (ASX: DYL) share price is up 3% to $1.50.
  • The Paladin Energy Ltd (ASX: PDN) share price is up 4% to $14.54.
  • The Peninsula Energy Ltd (ASX: PEN) share price is up almost 6.5% to 11.7 cents.

As a comparison, the ASX 200 index is down 1.1% at the time of writing.

Why are ASX uranium shares going gangbusters today?

Investors have been snapping up uranium stocks on Wednesday due to news out of the United States.

According to Bloomberg, the Biden administration is considering banning imports of enriched Russian uranium.

The US President's team is rumoured to be planning to use executive authority in congressional efforts to block the Kremlin's shipments of the reactor fuel stall.

The report notes that officials from the White House National Security Council, the Department of Energy, and other corners of the administration have been in talks on limiting Russian uranium imports.

However, sources have told the media outlet that no decisions have been made on the issue at this stage. The Biden administration would reportedly prefer the matter to be handled by Congress. This is because undoing a law is harder than overturning actions done using executive power.

Though, judging by the way ASX uranium shares are surging today, it seems the market believes this could be a done deal.

A statement from the US National Security Council said:

We continue to urge Congress to take that step, which would provide assurance to industry, allies, and partners that the US has made a clear decision to establish a secure nuclear fuel supply chain, independent of adversarial influence, for decades to come.

Is this a big deal?

Given how Russia is a significant producer of the chemical element, it certainly would have a big impact on supply and demand.

Bloomberg notes that Russia provided almost a quarter of the enriched uranium used to fuel the United States' 90 commercial reactors. This makes it the number-one supplier to the country.

And with uranium demand expected to outstrip supply in the coming years, if the United States does ban imports of enriched Russian uranium, it could drive uranium prices even higher than the lofty levels they trade at today.

Motley Fool contributor James Mickleboro 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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