Shares of top Canadian uranium producer Cameco slipped as much as 4.4 per cent on Monday, after Germany said that it plans to shut all its nuclear reactors by 2022.
The move to shut down its nuclear program comes just nine months after Berlin announced an extension to the lifespan of its plants by an average 12 years. That strategy was put under review in March, after Japan's earthquake and tsunami severely damaged the Fukushima nuclear power plant, causing a major radiation leak.
Shares of Cameco fell as low as $27.05 on Monday on the Toronto Stock Exchange, but rebounded in the afternoon to $27.50, for a loss of 80 Canadian cents, or 2.8 per cent. Shares of the uranium producer have slipped more than 25 per cent since mid-March.
Smaller rival Uranium One was down 2.9 per cent at $3.80 after falling as low as C$3.67. Extract Resources' Toronto-listed shares fell more than 5 per cent to $7.75, while Denison Mines was up 1.75 per cent at C$2.33.
In a note to clients, Dundee Capital Markets analyst David Talbot said that Germany's move could hurt uranium stocks in the short term as the news hits investor perception, but spot uranium prices would likely not be affected.
"We believe that investors in the uranium sector should stay the course - that the long-term fundamentals remain very strong for the sector - despite Germany's decision to opt out," said Talbot.
Germany accounts for about 5 per cent of global uranium demand, with just 17 nuclear reactors. By comparison, there are 104 nuclear reactors in the United States and 58 in France.
Despite the disaster in Japan, demand for uranium is expected to grow over the next decade, especially from China, which has 27 reactors under construction, 50 planned and 110 proposed.