Nuclear winter ahead for Uranium ETFs?

Uranium futures are trading at $46.5 per pound in the second week of January, despite fears of potential supply disruptions and a higher demand outlook. Political turmoil in Kazakhstan, the world's largest uranium producer, triggered fears that production could be interrupted. Worries of nuclear fuel shortages enticed physical uranium funds to ramp up their stocks. Sprott Uranium Trust, which bought almost a third of the world’s annual supply and helped push up uranium prices by more than 30% last year, added 1 million pounds of physical on January 8th, 2022.

Elsewhere, the European Union is drawing plans to classify some nuclear power and natural gas plants as green investments that can help Europe cut planet-warming emissions, a proposal that, if approved, could set off a resurgence of nuclear energy on the continent in the coming decades.

The potential bright outlook has led investors to bet $87 million on 4 available Uranium ETFs. Global X Uranium ETF took in the most (URA, $48 million), followed by North Shore Global Uranium Mining ETF (URNM, $36 million).  Last year, Uranium ETFs received $1.54 billion of net flows and were among the top-performing ETFs of 2021.

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