Stocks of uranium companies are falling despite the strongest long term fuel prices in more than 18 years, as investors weigh an expected tightening of supply against rising costs and the difficulty of bringing new projects into production. The VettaFi Global Uranium Mining Index dropped 16 percent in September and the Nasdaq Sprott Junior Uranium Miners Index lost 22 percent, while spot uranium prices barely moved, Sprott market strategist Paul Wong wrote in an October 28 analysis. The uranium miners index fell a further 5.57 percent on Friday to 33.73 dollars. Wong argued that tighter liquidity can raise the cost of capital, compress valuation multiples and delay recognition of future project value even when the expected uranium price is unchanged, and called those effects cyclical and financial.
The fuel market itself is tightening on a lag. TradeTech’s long term uranium price indicator held at 97 dollars per pound from June through September, up 13 dollars from a year earlier and at its highest level in more than 18 years, with utilities seeking deliveries beginning as early as 2027 and extending into the late 2030s. Analysts at Fitch Solutions’ BMI forecast spot prices averaging 95 dollars per pound next year, up from an expected 88 dollars this year, but they also expect global mine output to rise 7.8 percent this year, leaving a modest surplus near term before the market shifts into deficit next year. Longer term, BMI forecasts reactor uranium requirements growing an average of 4.1 percent a year over 2026 to 2035, ahead of mine production growth of 3.3 percent, with China’s reactor construction the main demand driver.
Kazakhstan is the nearer term supply risk. Commissioning of Kazatomprom’s sulphuric acid plant has been delayed until between the third quarter of 2027 and the first quarter of 2028 after palaeontological specimens were discovered at the construction site, BMI said, and the acid is essential to the country’s dominant extraction method. Kazatomprom has said it does not expect the delay to materially affect mining operations, but BMI forecasts lower Kazakh output next year on acid availability and the producer’s preference for value over volume.
Cameco, the sector bellwether, illustrated the operating pressure on Friday. The company reported third quarter adjusted earnings before interest, taxes, depreciation and amortisation of 267 million Canadian dollars, 44 percent below BMO Capital Markets’ forecast, according to BMO analyst Alexander Pearce. Attributable production of 3.5 million pounds missed the forecast by 19 percent and sales of 5.6 million pounds were 18 percent below expectations, while the realised uranium price of 65.80 dollars per pound met expectations. Cameco narrowed its annual production forecast to 19.5 million to 20.5 million pounds, from 19.5 million to 21.5 million, and raised uranium cost of sales guidance to 67 to 70 Canadian dollars per pound, from 63 to 67.50 dollars. The Key Lake maintenance shutdown extended into the fourth quarter, leaving a risk to production if the restart is delayed, Desjardins analyst Bryce Adams wrote, though he maintained a buy recommendation and a 190 dollar target.
The timelines explain the scepticism. At NexGen Energy’s Rook I project in Saskatchewan, construction began in June and first ore is targeted for the third quarter of 2030, with ground freezing in early 2027 and shaft sinking into basement rock in 2028 still to come, and about 1.2 billion Canadian dollars of remaining funding needs expected to be covered by prepayments or project debt in late 2026 or early 2027, according to Red Cloud Securities. Anfield Energy received draft licensing and groundwater permitting documents for its Shootaring Canyon mill in Utah on October 21 and targets licence renewal in the second quarter of 2027, which with about a year of construction points to production around mid 2028, with financing for about 117 million dollars of initial capital still necessary. Stronger prices alone do not shorten any of that.