From Petra Capital today Uranium Sector - Red Book '24 – new &...

From Petra Capital today



Uranium Sector - Red Book '24 – new & outdated – but “we need a price signal” ..





The latest “Red Book” was published in early April 2025. This is a joint report, developed and published by the Nuclear Energy Agency (NEA) in collaboration with the International Atomic Energy Agency (IAEA), and published every two years. The 608-page report consists of an evaluation of supply, demand forecasts and a resulting supply & demand outlook. It concludes that there are sufficient uranium resources available to meet demand. However...“(uranium) consumers and producers must ensure pricing mechanisms support the long-term investments required for new developments…A strong uranium market, characterised by sustained prices at an adequate level, will be crucial for developing resources in time to meet future uranium demand”. At present, that is not happening. The need is clear, but term prices are not incentivising new production, and equity prices reflect even weaker spot prices. Fundamentals are broken, but we believe that the disconnect can’t/won’t last. At current levels we are aggressive buyers of the sector.

Demand forecasts increased by 37% in two years…

• The latest Red Book 2024 forecasts a 37% increase in nuclear capacity for its low case and a 7% increase in its high-case scenario, when compared to the Red Book 2022 (Figure 3).

…and the “bible” is already out of date

• Scenarios in the Red Book 2024 were based on policies in place as at 1 January 2023, so none of the positive commitments to nuclear made in 2023 or 2024 are captured. The high-case should be taken as the de facto low-case in our view. In addition, many of the Red Book’s supply assumptions are now patently wrong.

Iberian blackout highlights importance of inertia

• The recent country wide electricity blackouts in Spain and Portugal highlight the importance of large turbines (such as nuclear) in providing the inertia needed to stabilise the grid. Spain currently plans to phase out its seven operating nuclear plants by 2035.

Preferred ASX exposures

• At these levels we see strong value across the ASX listed sector, with high levels of short interest across the ASX likely to increase both returns and volatility.

Sector catalysts

• Ongoing - Spot price increase (Figure 8)
• Ongoing – Direct Tech. Industry involvement.
• September 2025 – WNA Nuclear Fuel Report – likely a base case demand increase while supply is decreased