What happened

Shares of uranium miners Energy Fuels (NYSEMKT: UUUU), Cameco (NYSE: CCJ), and NexGen Energy (NYSEMKT: NXE) stocks all dropped in afternoon trading Monday, falling 7.5%, 8.7%, and 9.2%, respectively, through 12:30 p.m. EDT.

That’s curious, considering how the price of uranium has been behaving lately.

So what

Since its most recent bottom in late April, the spot price on uranium has run up 12.5% to $30.26 per pound today — and you’d think that investors in miners Energy Fuels, Cameco, and NexGen would take that as good news, but here’s the thing: Today’s uranium price is roughly equal to what the atomic power raw material cost 11 months ago, in July 2020. It’s not so much a spike in price we’re seeing, therefore, as a climb back toward normal.

Now what

As MiningReview.com points out today, you need to see spot uranium prices around $60 per pound to “incentivize” producers to mine more uranium. And you can probably take that price point as a proxy for when prices are good enough that miners can earn a decent profit from mining the stuff.

So despite the Biden administration’s protestations that it sees nuclear power as “a key part of our clean energy future,” and despite the administration budgeting a record $1.85 billion “to support existing and advanced nuclear technologies” in its latest budget, the simple fact remains that Cameco stock has been unprofitable for more than a year, NexGen Energy hasn’t earned a full-year profit since 2018 (and was only barely profitable then), and Energy Fuels has been unprofitable since 2012 (according to data from S&P Global Market Intelligence).

A pound of uranium sold for more than $50 (before inflation) back in 2012, by the way, which suggests both that MiningReview’s assessment of the necessary price for profitability is probably correct, and that prices still aren’t anywhere near where they need to be for these companies to earn a profit today.