Global Conflict Is Strengthening the Case for Uranium

April 15, 2026 | (22 mins 40 secs)

John Ciampaglia of Sprott Asset Management breaks down uranium supply, demand and price developments as the impact of the Iran war continues to spread through the commodities sector. In his view, uranium represents a place of relative calm compared to other markets.

Video Transcript

Charlotte McLeod: I'm Charlotte McLeod with investingnews.com. Here today with me is John Ciampaglia, CEO of Sprott Asset Management. Thank you so much for being here. Great to have you as always.

John Ciampaglia: Good to be back.

Charlotte McLeod: It's been a little while since we last spoke, so there's a lot to cover, and we're going to home in on uranium today. I wondered if you could start by taking a step back and helping me situate myself in where we are in the cycle right now. It seems that supply-and-demand fundamentals are always strengthening. I know we have a gradual price uptrend, but investor interest seems relatively low at this point. How are you seeing it?

John Ciampaglia: It's interesting because we just passed the one-year anniversary of the famous Liberation Day when Trump hit the world with all kinds of tariffs and tariff threats. That was actually a low part that we've seen in this cycle. It obviously hit many commodities, particularly uranium, due to the uncertainty, since uranium has a very global supply chain.

But if you fast-forward from the lows when uranium was at $63 a year ago, we're now sitting around $85. We've had a nice, healthy bounce for about eight or nine months, but things have changed dramatically in the last 6 weeks or so. But sentiment and interest in uranium have been incredibly strong. I say that for a few reasons.

One: the flows into our suite of ETFs have been very healthy. We take that as very strong validation that investors took advantage of the price dislocation last year and, so to speak, backed up the truck by adding to their positions. This year, we started off very strongly, with strong positive sentiment. Obviously, over the last six weeks, investors have been trying to figure out which way this conflict is going.

Unfortunately, we've lost some momentum. I would say there's no impairment to the long-term story. If anything, I think it's gotten better. But the short-term noise and uncertainty have really forced investors to the sidelines. Investors want to understand risks, but you cannot price or assign probabilities to risks in a war situation, particularly under this administration.

What we're seeing at Sprott is that many investors are just sitting on the sidelines. They're not running for the exits, but they're sitting on the sidelines.

Charlotte McLeod: I think that makes complete sense for investors right now. We'll get into many of the points you mentioned. Where I want to go first is with price. I believe the spot price briefly reached the triple-digit level in the first quarter. I wondered if you could talk a little bit more about what was driving that.

John Ciampaglia: There was a lot of excitement when we hit $100 again. It was really being driven by a few things. Obviously, there's this broad bullish sentiment around nuclear energy countries pivoting back to the technology and making significant investments in new builds. The war has obviously created a risk-off environment, and we've seen the price retrench about $15.

But the other point I should make, which is important, is the term price. The term price refers to a market reference price used to determine long-term purchase agreements for uranium that will be delivered many years in the future. How do you price something today for something you may not receive for 3, 4 or 5 years? This term price is used as a reference price.

What we've seen is that the reference price has gone up for six straight months, and it's right now sitting at $90. For historical perspective, $90 is the highest term price we've seen since 2008. It's a very powerful signal that we're back to this price point, which was really towards the tail end of the last market cycle.

Now, $90 in today's world is not the same as $90 in 2008, when you could buy more. Cost inflation has obviously pushed that number up significantly. When you think about what cost $90 in 2008, it can cost about $200 in today's inflation-adjusted terms. That's why we remain bullish on uranium, even though we're at $85 in the spot and $90 in the term. In the last market cycle, we broke $200.

Charlotte McLeod: That's some great context. I wanted to ask you about the utilities as well, the level of contracting that we're seeing. I haven't had many uranium conversations so far this year, but when I was talking to people in 2025, it seemed like we were still waiting for them to come back in. My impression is that started to happen toward the end of last year, but where are we at right now?

John Ciampaglia: Last year was a very unusual year, mainly because of all the uncertainty related to tariffs and trade relations, and Trump claiming the U.S. would end the Ukraine war in a week. Many utilities stepped away from the market for much of last year. We saw a very quiet market in the first half of the year. It picked up a bit in the third quarter, then came to life in the last two months of 2025.

It still was a below-average year. Our expectation is that, now that much of this uncertainty has been lifted, we'll get back to contracting. We are starting to see utilities come to market. I think the most notable thing that we should touch on is India. India, after China, has the most aggressive nuclear energy build-out plan in the world. They just announced two multi-billion-dollar long-term uranium purchase contracts with the two leading producers in the world: Canadian-based Cameco and Kazakhstan-based Kazatomprom.

They are basically signaling that they want security of supply. They have not signed a big contract with Canada since 2015. For them to come back into the market and sign these two big blockbuster deals tells you they're getting very serious about making sure they have the fuel in place so that when they build all these new reactors, they'll be able to turn them on. China has also been very active. South Korea has been active.

We're starting to hear rumblings that U.S. utilities are perking up in the marketplace as well. This year, we expect it to be better because there's some pent-up demand in the pipeline.

Charlotte McLeod: Would you say in these transactions, as more of the utilities are coming back to buy, that it is the companies that still have the upper hand in their negotiations?

John Ciampaglia: That’s a good question. Five or six years ago, it was very one-sided. The utilities had enormous negotiating power over the producers. These are bilateral contracts that are negotiated privately. The utilities in the old days used to get very flexible terms, or "flex options". The utility could either increase or decrease its order by, say, 15% at the same terms, at its choice.

Fast-forward to now, and key producers are not offering these flex options. The prices they're getting will serve as a market reference, meaning the future price will be adjusted based on the market at that time. But more importantly, you're starting to hear about price ceilings that are around $150 a pound. What does that mean? The spot price of uranium today is $85. You can get it today for $85, but you don't need it today, you need it in five years. The mechanism is that you're going to pay the uranium seller the spot price in year five, the year of delivery. But say, for instance, the seller creates a floor, which is a minimum price and a maximum price; that is called a "collar". They could collar the price at a high and a low.

Right now, you may pay a minimum of $75, but if the market's at $145, you'll pay $145. If the price is $165 a pound, you'll hit the cap and only pay $150. That's a typical transaction that utilities will enter into for long-term delivery. The fact that this ceiling price is now in the $150-per-pound range and the spot price is at $85 is a very strong signal that the direction of travel for uranium prices is up.

Charlotte McLeod: Your explanation makes a lot of sense. I want to get a little bit deeper into the Iran war. I think many people are wondering what this means for the uranium market. It's shown us once again how precarious the oil and gas market can be in times of conflict. That would seem to be positive for uranium. But what nuance would you add there? Because I think a lot is going on.

John Ciampaglia: I think it's a good point. We've been talking about this since February 2022, which is when the war broke out in Ukraine. We felt at the time that the particular event and the related energy shock it created in Europe and Asia were really going to galvanize political will to shift energy policy back to nuclear energy.

Remember, just five years ago, Europe was marching down a path to phase out much of its nuclear energy and favor wind, solar or natural gas. Natural gas has been disrupted. There are real physical limitations to running an economy on wind and solar. In the last month, it's been amazing to us that the President of the European Union and the Chancellor of Germany have both publicly stated that their decisions to phase out nuclear energy over the last few years were strategic mistakes.

It only took two energy crises for that to happen. But we think the winners in the coming years, from an energy mix perspective, will be a greater push towards nuclear energy because it's so energy-dense. There's been no disruption to any uranium supply chain due to the war. The second winner is likely to be renewables, particularly solar, as people look to diversify away from oil- and gas-based electricity generation.

We're already starting to see signs of that happening. Governments are increasingly saying they need to diversify away from oil and gas to reduce their vulnerabilities. The world's obviously learned how vulnerable closing off one waterway is. The impact is outsized in Europe, particularly in Asia and even in Australia and New Zealand, countries that were scheduled to run out of gasoline in the next 30 days. It can really cripple economies. I think governments are going to take the lessons learned from the last six weeks and start shifting policy even further to mitigate further disruptions.

Charlotte McLeod: You mentioned there haven't been disruptions in uranium supply due to the war. I wanted to bring up what's going on with sulfuric acid, because its supply is being disrupted by the closure of the Strait of Hormuz. China has said it is going to cut off exports. Can you talk about how sulfuric acid is used in the uranium sector and if there could be an impact down the line?

John Ciampaglia: People are probably wondering what the heck sulfuric acid has to do with uranium mining. There are really two types of uranium mining. Hard rock mining, so think of it as traditional mining, whether it's underground or open pit, where the uranium is hosted in hard rock, sandstone and granite. Then there's something called in-situ recovery or ISR mining.

Think of it almost like you're in the steppe or the desert, and the uranium is in the sandstone, and you have to physically leach it out of the sand. It is a chemical process in which they inject sulfuric acid into the ground, leaching uranium from the soil. It's more like an oil-and-gas type of process than an actual hard-rock mining process.

Kazakhstan is the world's largest uranium miner, so think of it as the equivalent of OPEC. They produce as much uranium as OPEC produces oil, about 40% of the world's uranium, and they exclusively rely on this ISR mining. Some U.S. mines also use this technique.

There are now concerns with disruptions in sulfuric acid, smelting and oil and gas production. Countries are now saying, "Hey, we need to hoard what we have locally. We're not going to send our sulfuric acid elsewhere, because there could be shortages." The question is, "Could this have a material impact on uranium mining?"

I think, in the short term, the answer is no, because the wells are injected months before they're recovered. But if this conflict lasts for an extended period, depending on where your supply comes from, it could affect uranium. It could also have a lesser impact on copper mining. Some copper mining processes require sulfuric acid.

But the big thing being impacted right now is fertilizer, not because of sulfuric acid, but because natural gas is a key ingredient in the chemical process that produces it. I think most people have no idea how interconnected all these things are. Thankfully, in North America, we're very energy and resource-rich. But in many places, like Europe and Asia, I am sure they're having a lot of late-night meetings, panicking about what happens if we run out of gasoline or fertilizer.

Charlotte McLeod: It seems like we're all on a crash course right now, learning how all these different things are interlinked. It really comes down to duration, and I'm finding that's what I'm hearing across a variety of sectors. We need to know how long this is going to last, which, of course, we can't know.

John Ciampaglia: Exactly. That's why it's so hard to manage your supply chain when you don't know whether it's a two-week or a two-year thing. Infrastructure takes a long time to build. I'm sure the wheels are spinning right now around how to change our infrastructure plan to mitigate some of these risks. We would expect countries to invest much more heavily in storage systems to hold oil, gas or other key parts of their supply chains, so they don't get caught out in the event of another disruption.

Charlotte McLeod: On the note of supply, I wanted to ask you what developments you're watching most closely right now. I know there was excitement in the first quarter here in Canada about Denison. What do you have your eye on right now? Because, of course, we do need that uranium supply.

John Ciampaglia: I think everyone was very excited and relieved to finally get those two permits in the Athabasca Basin, and we're talking about Denison and NextGen. I think these are the first uranium permits issued in 30 years. This has been a long time coming, and the process took years. Now it's go time. It's “show me you can build these mines and get the product to market.” Everybody's very anxious to see how these projects develop.

Now, with all complicated infrastructure projects, we know there are time delays, snags and unforeseen issues. The companies will have to work through those inevitabilities and bring their products to market. I know utilities are very keen to diversify by supplier, so I'm sure they're having lots of very active discussions with those companies about signing agreements for their future production.

We still have a few years until the material hits the market. It's very important because, right around the time of those two projects, which are scheduled to come online, we see really high market demand as some older mines start to run down and more reactors come online.

There's a real supply crunch building around 2030-2032, right around the time some of these projects are supposed to enter production. It's going to be very interesting to see if those two things intersect.

Charlotte McLeod: I was going to ask you to bring everything together and tell me what the supply-demand balance is looking like for this year. But it sounds like it's later on when we really get that crunch coming together.

John Ciampaglia: I think it's important to highlight we're in a deficit right now. It's expected that the world's uranium production this year will produce about 160 million pounds. But uranium demand is at 190 million pounds and rises by about five million pounds each year as more reactors receive life extensions and are returned to service after closure. Many plants are doing “up rates,” meaning they're producing more electricity from the same plant.

All of these things require more uranium, which is why the demand curve keeps going up. There's been a supply response. Five years ago, the world produced only about 125 million, but all the easy stuff is done. All the restarts and whatnot. Now we've got to get into the next phase of production, which is building brand-new mines, and that's where the risks come into the timelines.

Charlotte McLeod: As we're wrapping up, I'm wondering what your main message for investors is right now, because, as you've been outlining, it looks like the picture is just getting better, as it always seems to be with uranium. But we're also in this period right now, with the war, and maybe we're in a holding pattern. What would your message be?

John Ciampaglia: I was just looking at some of the numbers. The S&P 500 is flat for the year. The uranium price is up about 5% this year. Obviously, it was up a lot more prior to the last few weeks. But I joke with my colleagues that uranium has been the sea of calm relative to other commodities that have been jumping around a lot. I think it's because its fundamentals are very different, driving its pricing.

We haven't really seen a pullback in interest. We've seen not just on our own funds, but all the funds that we track in this thematic, they've generally been bringing in money this year. I think it's still bullish. Now, in the short term, are we going to see wild days of up 5% and down 5%? Absolutely. We're in that environment right now. Everything is susceptible to that.

John Ciampaglia: But I think if you have the right expectations, think about this as a two to five year trade. I think it'll serve you well, because the fundamentals look very favorable around that supply deficit, which is only getting bigger. We just don't see any meaningful new supply coming online in the market until at least 2030, 2031, perhaps. I think that really supports the market.

Volatile, for sure. Don't get whipsawed around by trying to time it and trade it. I think you just have to dollar-cost average and try to take advantage of these dips. But we view uranium and the broader suite of critical metals as big beneficiaries right now, and unfortunately, the fracturing we're experiencing in the world.

Charlotte McLeod: I think that's a nice note to wrap it up on. I like the context in terms of other commodities. It helps me visualize where we're at. Thank you so much for coming on to explain where we're at in uranium. This is very useful as always.

John Ciampaglia: Thank you for having me.

Charlotte McLeod: Of course. Once again, I'm Charlotte McLeod with investingnews.com. This is John Ciampaglia of Sprott Asset Management.