CME Nears Uranium Storage Deal for Physical Futures Contract

CME Group (NASDAQ:CME) is close to a deal to store uranium at the only commercial-scale conversion plant in the US, a step toward a futures contract based on physical yellowcake.

Bloomberg reported on Wednesday (November 11) that the exchange operator is in the process of finalizing an arrangement with ConverDyn, a 50/50 joint venture between Solstice Advanced Materials (NASDAQ:SOLS) and General Atomics, according to a person familiar with the matter.

Documents are reportedly in final legal review, with the unguaranteed expectation that the deal will close by year end.

Under the proposed terms, Solstice would manage CME’s inventories of uranium concentrate at its Metropolis Works facility in Illinois, and ConverDyn would handle the accounting.

Metropolis Works converts yellowcake into uranium hexafluoride, the form used in enrichment.

All four companies declined to comment.

The new contract would offer an alternative to CME’s existing UxC uranium futures, which settle in cash and see little trading. It would also join a short list of products offering direct exposure to the fuel.

The Sprott Physical Uranium Trust (TSX:U.U,OTCQX:SRUUF) holds more than 81 million pounds of uranium oxide, while Yellow Cake (LSE:YCA,OTCQX:YLLXF) owns about 24 million pounds.

Uranium demand is rising with artificial intelligence data center construction and government plans to expand nuclear power, while years of underinvestment have left supply trailing.

The spot price has gained more than 10 percent this year and was above US$90 per pound as of Tuesday (November 10); it has more than tripled over six years, and topped US$100 in early 2024 and again in 2026.

The uranium contract would add to a string of new CME products this year. In October, CME said it would list financially settled tungsten futures on the Comex by early 2027, pending regulatory review.

CME also introduced 100 ounce silver futures in February and opened its 1 ounce gold futures to 24/7 trading in July. In June and August, it said it would extend round-the-clock trading to the silver contract, while also unveiling a 10 barrel West Texas Intermediate crude oil contract.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.