Why Trump’s nuclear plans have so far failed to boost uranium prices

The spot price for U3O8, a lightly processed concentrate known as yellowcake, this week shed some of the small gains it made a week ago after President Trump signed executive orders on May 23, aimed at quadrupling nuclear-power capacity in the next 25 years.

The commodity’s price rose to $71.10 a pound on May 26 from $70.50 a pound in the week prior, according to UxC, a market-data firm that assesses uranium prices. This week, it is back at $70.90 a pound.

The executive orders have so far had a short-lived impact on the uranium market, said Jonathan Hinze, president of UxC. “People are waiting to see how these new policies might translate into new reactors and fuel demand, but that will take some time," he said.

The industry has reasons for caution. Over the next few years, the market faces a persistent oversupply, according to analysts at Panmure Liberum. They project the average spot price will be back below $60 a pound in 2026.

Miners have been ratcheting up production of uranium after the market emerged from a decadelong funk that followed the 2011 Fukushima disaster in Japan.

This year, the industry—like many others—is also grappling with tariff uncertainty under the Trump administration, which has paralyzed U.S. utilities.

While up from a March low of around $63 a pound, an 18-month nadir, uranium’s spot price remains down 1.2% year to date, according to UxC. It traded above $100 a pound as recently as last year on supply disruptions.

The spot market—while thinly traded and, consequently, volatile—can be an important indicator of sentiment in the otherwise opaque uranium industry. It is also a source of sales for miners to generate profits.

Uranium doesn’t trade on an open market like many other commodities. Instead, most uranium dug up by miners is sold under long-term contracts to customers that include U.S. power companies. That term price has sat around $80 a pound for most of this year.

The spot trade makes up less than 20% of the market, and includes one-off deals between producers and power utilities as well as traders and funds that hold physical uranium.

Recent spot-market sluggishness hasn’t curbed excitement in the broader market, as expectations of a nuclear comeback rise. “It’s time for nuclear," Trump said at a signing ceremony at the White House last month.

Investors bet on uranium mostly via the stocks of uranium companies or exchange-traded funds.

The Global X Uranium ETF—which tracks a basket of companies involved in mining uranium and producing nuclear components—has gained roughly 12% versus its closing value the day before Trump signed the orders. Canadian miner Cameco, one of the world’s top uranium producers, is up about 10% over the same period.

Citi analyst Samuel Schubert sees reasons to believe the U.S. executive orders could stimulate uranium demand in the near term. “These aren’t just long-dated ambitions," Schubert said in a recent note.

He highlighted Trump’s order for the Energy Department to work with utilities to increase maximum power at which existing reactors can operate, among other actions.

“We think these executive orders could help reignite investor interest, in particular through uranium ETF demand," added Morgan Stanley analysts in their own note. That could support future spot purchases, given that some physical ETFs buy uranium from the market, they said.

Still, the time it takes to develop nuclear capacity means there is likely to be a limited immediate impact on uranium demand more broadly, Morgan Stanley analysts said.

The Panmure Liberum analysts said nuclear plans—not just in the U.S., but in Indonesia, Germany, and Belgium, too—could result in prices higher than they currently forecast, but not likely until at least 2027.

“At this very early stage, the uranium market has no useful data to work with yet on the scale/duration of reactor capacity growth in Indonesia-U.S.-Germany-Belgium," the analysts said.

Even China, known for its speedy construction, takes between five and 10 years to design, approve, and build a reactor, they said.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com