It has been a great finish to the week for Paladin Energy Ltd (ASX: PDN) shares.
In afternoon trade, the ASX uranium stock is up 7% to $8.46.
But this gain isn't even the strongest in the industry today.
For example, at the time of writing, Deep Yellow Ltd (ASX: DYL) shares are currently up 10%, Lotus Resources Ltd (ASX: LOT) shares are up 13%, and Bannerman Energy Ltd (ASX: BMN) shares are up 14%.
Why are ASX uranium stocks rocketing?
Investors have been scrambling to buy ASX uranium stocks on Friday after there was some big news in the industry.
That news came from Canadian uranium giant Cameco Corp (NYSE: CCJ).
According to the release, Cameco has been informed by its partner Kazatomprom that production has been suspended at its Inkai joint venture in Kazakhstan.
The release notes that the Inkai JV has not received an extension to submit its updated project for Uranium Deposit Development documentation. This was an extension that was expected prior to the end of 2024.
Kazatomprom has informed the uranium miner that the extension was not received as expected due to the delayed submission of the necessary documentation to the Ministry of Energy.
In light of this, Kazatomprom has directed the joint venture to halt operations to avoid potential violation of Kazakhstan legislation.
Commenting on the news that gave ASX uranium stock's a huge boost, Cameco said:
Based on the information we had been receiving from JV Inkai and Kazatomprom, a process to address the update of the Project Documentation was underway and a positive outcome was expected. Reports received by Cameco as recently as December 26, 2024, made no mention of a production suspension being a risk in relation to this process.
We are disappointed and surprised by this unexpected suspension and we will be seeking further clarification on how this transpired, as well as the potential 2025 and 2026 production and financial impacts (including on future dividends), and what Cameco can do to help Kazatomprom and JV Inkai restart mining operations.
This is bad news for Cameco but good news for ASX uranium stocks. That's because any potential supply constraints could have a major impact on uranium prices. Especially given how demand is increasing for the chemical element.
Short squeeze
Also potentially giving uranium stocks a lift today is short covering.
Paladin Energy and a number of other ASX uranium stocks, such as Boss Energy Ltd (ASX: BOE), are among the most shorted on the local market.
With their shares hurtling higher, it is possible that some short sellers will be buying shares to close their short positions.
