- Cameco (NYSE:CCJ) wound up rallying 3.5% in today's trade for its highest close in more than a month following news it will suspend production from its McArthur River mine and Key Lake mill because of low uranium prices.
- Initial investor concerns were outweighed by the outlook for higher uranium prices caused by the move - “This is the type of supply shock that will spur strength in the spot price,” says Cantor Fitzgerald analyst Rob Chang.
- CEO Tim Gitzel says CCJ is not planning further cuts to uranium output “right now” but has the option of lowering production again without jeopardizing supply contracts - "We have to be ready if the market stays low so we can survive and be viable."
- TD Securities expects upward pressure on uranium prices in the coming days but believes other producers also will need to cut supply for sustainable price gains; the firm reiterates its Buy rating on CCJ and raises its stock price target to C$15 from C$13 in anticipation of higher uranium prices.
- Uranium peers finished higher in today's trade: UEC +18.2%, URG +16.9%, UUUU +14%, DNN +13.3%, WWR +8.5%.
- ETFs: URA, NLR
- Now read: Uranium names poised to gain on 'biggest catalyst since Fukushima'
Original article