The long-beleagured uranium sector is experiencing a structural shift that could see spot prices rocket to US$90-100 per pound (lb) by the end of this year.
Uranium (U3O8) spent the better part of the 2010s trading between $20-30/lb - well below the $50-60/lb threshold most miners require to stay profitable, causing a lack of new supply.
Now, after spot prices being coiled for the better part of two decades - compressed by oversupply, political and natural disasters, and general market apathy - the uranium spring is about to be released with considerable force.
Production cuts from industry giants Cameco and Kazatomprom, combined with an insatiable AI-driven energy demand, are creating the perfect storm for round two of a sustained yellowcake bull market.
Supply shocks
On 2 September, the TradeTech U3O8 spot price rose to US$76.30/lb, a rise of US$1.30/lb on the week, the move coming on the back of Cameco's announcement that the transition of its McArthur River mine would be delayed.
Production from McArthur River/Key Lake is now anticipated to be between 14-15Mlb U3O8 for 2025, down from the previous forecast of 18Mlb.
That's a 16-20% production cut from one of the world's largest uranium operations, or equating to about 10-13% of global primary production.
Meanwhile, Kazatomprom - Kazakhstan's state-owned uranium giant - will scale back production in 2026, noting that current supply and demand dynamics don't justify its return to full capacity.
With Kazatomprom accounting for >40% of global supply, its output will drop 10% lower than earlier targets - that's roughly 8Mlb of U3O8 removed from global supply.
The Prohibiting Russian Uranium Imports Act has further tightened Western supply chains.
To boot, global production of uranium met just 80-90% of reactor demand in 2024, with the shortfall made up from various stockpiles - a buffer that's rapidly depleting.
Yet all of these factors pale in comparison to the energy demands the oncoming AI boom is bringing with it.
Microsoft is planning to invest about US$80 billion in fiscal 2025 on developing data centres for AI models and applications - operations requiring constant, reliable baseload power that only nuclear can provide.
Google and Amazon both have signed long-term nuclear deals to fuel their AI ambitions, representing a fundamental shift in electricity demand patterns.
Bull case strengthens
The financialisation of uranium through instruments like the Sprott Physical Uranium Trust has added another dynamic to contend with.
SPUT closed an upsized deal for US$200 million to purchase physical uranium, removing it from the market permanently.
Recent purchases of U3O8 totalled 1.2Mlb in Q3, cementing a price floor that didn't exist in previous cycles.
Meanwhile, Uranium.io has launched the world's first live uranium spot pricing oracle, injecting transparency into a market that has long operated in the shadows.
Better price discovery typically leads to more institutional participation, with 97% of institutions surveyed saying they'd consider uranium exposure if access were simplified.
Markets react
And yes, the equity markets have already taken notice.
Aussie producer Paladin Energy (ASX: PDN) has rocketed from a six-month low of $8.33 in September to mark a more than 1000% gain in share price from five years ago.
While fellow Australian uranium miner Boss Energy (ASX: BOE) is up as well, as it enters the final stages of mine development.
Both stocks had struggled since peaking early last year. That peak, not coincidentally, coincided with the top of the first 4-year uranium bull market that saw the spot price reach US$110/lb.
U3O8 prices then dipped into the low 60s by March this year, but have since fought their way back to trade around US$76/lb at present.
In fact, the entire uranium equity complex has surged, with NexGen Energy advancing its world-class Rook I project, Denison Mines progressing Wheeler River using innovative methods, and Uranium Energy Corp resuming Wyoming production.
Experts are becoming increasingly bullish too; analysts Goehring & Rozencwajg said the nuclear power story is no longer about possibility - it's about arrival.
"The first leg of this bull market is behind us. Now, we believe the second leg, stronger, faster, and more decisive, has begun."
Most credible forecasts cluster around the $80-$100/lb mark by the end of this year. Morgan Stanley depicts US$87/lb for Q4 2025, while Bank of America envisions uranium reaching US$135/lb by 2026.
A pivot in U.S. government energy policy is providing related companies unprecedented support for nuclear power generation.
Trump's executive orders earlier this year will target 400 gigawatts of domestic nuclear capacity by 2050 - a fourfold increase.
It makes sense, considering America consumes 45Mlb annually while producing just 1% domestically.
With no meaningful supply on the horizon for the next three to five years, this new uranium bull market has significant room to run.
