The uranium market seems to be turningAs tariff threats loom,...

• The uranium market seems to be turning
• As tariff threats loom, contract prices continue to hold up their multi-year highs
• Could one of these seven bargain barrel picks be the next multi-bagger uranium stock?

Uranium spot prices have finally woken from their slumber, with prices climbing from a persistent 18-month low in the US$64/lb range to US$70/lb at the end of last week.

The recharge has been helped by a production disappointment from Kazatomprom, the world’s largest producer. Cameco’s Tim Gitzel said market uncertainty, especially around whether some uranium imports could eventually be placed on Trump’s tariff list, has also kept utilities out of the market.

But that means some 70% of demand for the next two decades remains uncontracted, a recipe for a price shock down the line.

Long-term contract prices, which offer a clearer view of the market’s underlying long-term dynamics, are also continuing to hold up multi-year highs at over US$80 per pound.

Unlike most commodities, uranium is not actively traded on major exchanges. Instead, the market is dominated by long-term, bilaterally negotiated contracts that meet the annual fuel needs of nuclear power plants, with only a limited spot market addressing short-term or discretionary demand.

Guy Le Page, a former geologist, experienced stockbroker and director at Perth-based financial services provider RM Corporate Finance says along with the positive contract price, there are four other reasons why the uranium market is set to bounce in the near term.

These include a declaration by 31 countries at COP28 to triple global nuclear capacity by 2030 and the fact that renewable energy is incapable of providing base-load power with zero carbon emissions.

“Nuclear is one of the cleanest fuel sources likely to take a leading role around the globe in the provision of base-load power as fossil fuels are phased out,” he said.

“[Another] reason that uranium is gaining ground, according to UxC Uranium Market Outlook [a quarterly report on the uranium market], is that utility activity remains robust, averaging over 90 per cent via term contracts in the past three years with contracted activity remaining below replacement levels.

“They also believe that global nuclear utilities have approximately 1 billion pounds of uncovered uranium requirements over the next decade, which indicates significant future demand in the market and could drive higher prices and create supply challenges.”

Le Page sees uranium contract prices surging above the US$80-85 mark to around $115 or $120 per pound in the next two years.

“I think that $120 mark is going to be the incentive price going forward to bring on new uranium production – there is about a billion pounds of uranium that is uncovered and required for utilities, which is a substantial amount and obviously the spot market is quite illiquid, relying on going to the spot market to top up their requirements is really not an option,” he said.

Another Guy following uranium closely – Tribeca’s Guy Keller – says nuclear generation capacity is now being pushed “extraordinarily hard” by global tech companies that are cashed up and spending billions rolling out technologies that require base-load electricity.

He believes there will be a crunch point where tech companies will question utilities about whether they have the uranium to support nuclear electricity for the next 20 years.

The World Nuclear Association (WNA) projects a significant increase in global uranium demand over the coming decades, primarily driven by the growing nuclear power sector and increased global electricity demand.

The WNA’s Nuclear Fuel Report estimates that uranium requirements will increase by 28% between 2023 and 2030 and by 51% between 2031 and 2040, based on a reference scenario.

This growth is influenced by both the expansion of existing nuclear power plants and the construction of new ones.