(Reuters) – Shares of uranium producers surged in early trading on Monday after Kazakhstan’s uranium output cut spurred expectations the move would help clear a glut that has roiled the global markets since the Fukushima meltdown in 2011.
U.S.-listed shares of Canadian uranium miner Cameco Corp rose nearly 18 percent to a high of $11.17, putting them on track for their best day in nine years.
The company’s Toronto-listed shares were up 15 percent.
Kazakhstan, the world’s largest uranium producer, slashed its output forecast by 20 percent for the next three years.
Analyst Rob Chang of Cantor Fitzgerald termed the output cut “earlier than expected”, adding that the latest supply shock will boost strength in spot uranium prices.
Spot uranium prices, which dropped to near 13-year lows in 2016, are now expected go up as much as $30 a pound, according to Chang.
The Central Asian country’s action comes weeks after Cameco said it would suspend production in its McArthur River mine in Saskatchewan, the world’s biggest uranium mine, due to low uranium prices.
Shares of another Canadian miner Nexgen Energy rose 14 percent, while Westwater Resources, formerly Uranium Resources, gained 7 percent.
The shutting down of nuclear power plants in Japan in 2011 following the tsunami sent uranium spot prices plunging. Spot uranium prices traded at $23.60 per pound last week, a 66 percent drop from around $70 per pound before 2011.