Uranium stocks spike on Cameco cutbacks

Uranium stocks spike on Cameco cutbacks

Uranium stocks spiked on Thursday with the news that Cameco was temporarily suspending production from the McArthur River and Key Lake uranium operations in Canada. However, it will continue to supply the market from its large inventory, expecting that the shutdown will last for about 10 months.
The Aussie uranium stocks immediately reacted with speculators buying aggressively, but as usual, the emotional gut reaction lacked any logic. This is a temporary closure. It doesn’t take the mines offline permanently. There will be no disruption to supply, as there is a large stockpile to draw upon. The reason why the suspension is taking place is because the uranium market is very ugly. Thus, it is an acknowledgement of how bad it really is. It is not a buy signal.