Several catalysts lined up to fuel sector seen as critical for future of energy
The uranium market has momentum on its side as it looks to end 2025 on a strong note, but several factors will be important in shaping future trends including the ability of major producers to maintain disciplined output, alongside the progress and setbacks of new mine developments, Sprott said.
Sprott said the fall in uranium prices earlier this year was a temporary setback and the long-term bullish thesis for the nuclear fuel remains, robustly supported by a convergence of policy tailwinds, surging demand from the tech sector and persistent structural supply deficits.
It said several catalysts are lining up to fuel a sector seen as critical for the future of energy.
In a report released on Thursday, the Canada-based precious metals asset management company listed three key developments that could lift uranium even further: the US government’s critical minerals policy, accelerating demand for the nuclear fuel, and concerns surrounding supply.
Sprott analysts pointed to the Trump administration’s intent to stockpile more uranium to alleviate the supply gap for US utilities and the country’s heavy reliance on foreign supply, in particular that of Russia. The plan, if enacted, could result in billions of dollars in funding towards building a secure uranium supply and the required nuclear technologies, reinforcing a bullish outlook for the sector, Sprott said.
Secondly, Sprott said it is increasingly confident in uranium’s long-term fundamentals. It pointed to a World Nuclear Association (WNA) report that outlined lofty demand expectations, from the current 175 million pounds of U3O8 equivalent annually to 391 million pounds by 2040, representing a 124% growth.
Lastly, Sprott’s bullish sentiment is reinforced by a structurally tight supply amid expectations of declining output from the world’s top producers such as Kazakhstan’s state-owned Kazatomprom and Canada-based Cameco, as well as execution risks across the development pipeline. It said the WNA report had missed some of the key production cuts, meaning the uranium market could be even tighter than headline figures suggest.
Sprott said these factors will be critical in driving the momentum in uranium as the current cycle progresses. In September, market sentiment turned sharply positive as fresh capital flowed in and supply tightened, leading to an 8% rise in uranium prices during the month and a rebound to $82/lb, it wrote.
The report added: “The ability of major producers to maintain disciplined output, alongside the progress and setbacks of new mine developments, will continue to influence near-term supply,” the report said.
“Delays in permitting, cost inflation and technical challenges persist as significant headwinds for supply.
“Meanwhile, China’s rapid nuclear build-out is adding further pressure, with aggressive procurement tightening the global market.”
