Justin Huhn, Founder and Publisher of the Uranium Insider, joins us to provides a comprehensive macro update on the uranium and nuclear fuel sector, after having a very good year of higher u308 prices surging over $80 per pound, and very nice moves higher in many of the more established uranium mining stocks.
On the demand side of the market, we continue to see big commitments to increasing their nuclear energy build out from many countries coming out of the ongoing COP 28 conference, and we note many surprising countries, like Sweden, South Africa, Ghana, Egypt, Morroco, and Uganda making commitments to build new reactors. Additionally we see both lifetime extensions on existing plants in the west, and Chinese reactor builds in the east as key demand drivers. With regards to the contracting cycle and term pricing, we have seen more transactions over the last year which demonstrates that the larger players are getting into position for a more active phase of the uranium pricing cycle.
Next we shift over to the supply side of the sector, and the increased interest in companies that can readily produce uranium, which is mostly isolated to a few of the largest companies like Cameco, Orano, and Kazatomprom, and then some of the smaller US-based ISR producers like Energy Fuels (UUUU) (EFR), enCore Energy (EU) (ENCUF), Ur-Energy (URE) (URG), Peninsula Energy (PEN.AX) (PENMF), and Uranium Energy Corp (UEC). Justin discusses the size of some of the new reactors being built and the initial fuel load many will need that is 2-3 times the normal operating fuel, and there just won’t be enough supply coming online to fuel all the 62 reactors under construction and the existing 436 global reactors, without some larger projects coming online.
We discussed the significance of the NexGen Energy’s (NXE) Arrow deposit, the Phoenix Project from Denison Mines (DML) (DNN), and Global Atomic’s (GLO) (GLATF) Dasa Project as key larger projects that will need to come online to feed the growing demand, but noted that they are still years away from production coming online. This creates a very interesting supply/demand mismatch over the next 5 year window of time, and Justin unpacks how this will continue to underpin pricing for the medium to longer-term, as well as continued interest in the uranium stocks from investors.
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