Uranium, an obscure commodity, is a new Reddit favorite. Prices for the radioactive metal rocketed 41% in 2021 — sending the few uranium mining stocks soaring.

What’s the big deal? Classic Econ 101. Demand for uranium, which fuels nuclear reactors for electricity power, is expected to surpass supply. Driving that demand is climate change:

• Nuclear is one of the few power sources to produce electricity without releasing CO2.
• Ambitious climate change targets from the Biden administration sparked debates on nuclear energy use to meet that goal.

There are only a small handful of uranium mines and bringing them online takes time — which could lead to more supply pressures.

The past: In the last decade, uranium prices have steadily fallen since the Fukushima nuclear disaster. Many expected the industry to go into free fall with nuclear reactor closures, but that hasn’t played out…

The future: According to Jonathan Hinze, president of the nuclear-fuel consulting firm, UxC (via MW):

• Nuclear power demand has already recovered to its pre-Fukushima levels around 2019.
• There are signs China and leading nuclear companies are committing to large-scale nuclear expansion.

The lifespan of 88 of America’s 93 nuclear reactors is already approved for 20-year extensions.

The ETF way: The Global X Uranium ETF — which invests in uranium mining companies and nuclear energy companies — is up 46% in the past month. Among its top holders include:

• Cameco (TSX:CCO), the world’s second-largest uranium — up 52% in the past month.
• NexGen Energy (TSX:NXE), a uranium exploration company — up 45% in the past month.

Dive Deeper: Large uranium players could drive uranium prices up.