Justin Huhn: The Uranium Market Is Setting Up for a Major Move
Summary
Long-term uranium prices have climbed from $80 to $95.50 per pound over the past year, driven by utilities contracting fuel into the early-to-mid 2030s.
The World Nuclear Association projects uranium demand to more than double by 2040, while 80 reactors are under construction globally, roughly half of them in China.
The biggest pinch point across the nuclear fuel cycle for the rest of this decade is uranium itself, not conversion or enrichment, per UXC fuel analysts.
NexGen Energy has broken ground on the Arrow project and is in active discussions with BHP over equity, offtake, or an outright takeout of the asset.
Uranium Royalty's acquisition of Sweetwater adds a cash-flowing royalty business and a large Wyoming land package, financed with roughly $625 million in long-term debt.
Justin Huhn's takeaways
- Top takeaway The guest is extremely constructive on uranium, expecting a stronger risk-on period ahead — citing the long-term price moving from roughly $80 to $95.50/lb, spot up about $3 in a month with no financial-buyer participation, and the start of the seasonally strong window.
- The guest argues uranium — not conversion or enrichment — is the real pinch point across the nuclear fuel cycle for the rest of the decade, citing two UXC representatives.
- His thesis hinges on a 2032-2035 supply gap: utilities are contracting now for that window, but 2B projects that could supply it have not started construction, so incumbents will run out of pounds and utilities will be forced into the spot market.
- He frames the early-to-mid 2030s as happening right now in this industry because that is the window driving term contracts and reported term prices; the WNA's reference case (demand more than doubles by 2040, roughly 5.5M lb deficit today, 197M lb projected demand) is his macro anchor.
- His models show roughly 20M lb shortfall this year (drawing commercial inventories) and about 25% growth in nuclear capacity over the next 5-6 years from reactors under construction — 39 of them in China alone.
Scott Melbye's takeaways
- Top takeaway The guest attributes to Scott Melbye the call that utilities will be forced into the spot market in 2032-2035 because incumbent producers will have run out of pounds to sell into that window.
- The guest credits Scott and team at Uranium Royalty with a more thorough and informed view of uranium demand and nuclear power than most, including close ties to the US government on the nuclear side.