Uranium Outlook 2026

Podcast Transcript

Ed Coyne: Hello, and welcome to Sprott Radio. I'm your host, Ed Coyne, Senior Managing Partner at Sprott. I am pleased today to have our CEO of Sprott Asset Management, John Ciampaglia, join us to wrap up 2025 in the world of nuclear. John, the last time we spoke, back in September, you were just returning from the World Nuclear Association (WNA) Symposium, and there seemed to be a lot of excitement surrounding that. Since then, there have been no significant changes in prices. Perhaps let's start with that first, and then we'll move forward with what may be happening in the future.

John Ciampaglia: Yes, thanks, Ed. Good to be back. There was a lot of excitement coming out of WNA, and I think that was largely on the back of two things. One, the association released its biennial supply and demand forecast, which showed significantly more robust growth for uranium out to 2040. That's well understood. There are active programs in place, and new ones are being announced regularly, offering financial support and signaling increased capacity. However, these initiatives do not currently have a significant impact on the market. Those are long-dated projects. They don't translate into uranium demand in the very near term, but they will lead to greater demand in the long term.

At some point, we hit a bit of an air pocket, and I think part of it was not related to uranium or nuclear energy whatsoever. I think that's the thing that's created the disconnect, where the fundamentals, as well as the announcements for nuclear and uranium, have been very constructive. Still, the stocks and the price of uranium have been subject to volatility across a greater risk-off environment that we saw in the back half of October and November, which was a very challenging month for many different commodity sectors. Anxiety is starting to build regarding the pace of these AI data center buildouts and whether there will be missed targets in meeting some of these very aggressive expectations.

We take a step back and say from the perspective of the spot price in uranium, it was a lost year; that's the way I'm thinking about it, in that the price was very range-bound. We started the year at around $70, reached a low of $63 around Liberation Day, rallied to $83, and are currently sitting with a very wide bid-ask spread of $77 to $80. It's been a relatively uneventful year, despite the backdrop being extremely bullish in terms of announcements.

The stocks, on the other hand, have fared better and are being driven by a greater number of investors. They are examining the fundamentals for the future and evaluating the industry's prospects, given the structural supply deficit and bidding those stocks up. We've seen uranium stocks up on average around 40% for the year, even though the commodity price has been rather muted.

I believe the commodity price has been held back due to a lack of contracting by utilities and a lack of buying in the spot market. There's a real disconnect between what's happening in the physical market and what's happening with equities, which I think are more forward-looking.

Ed Coyne: That's an interesting point because many of our listeners know us through the gold and silver side of the market, and it has really been the opposite for the last decade or so, where the physical market's done quite well, and the miners have lagged. I find it interesting that on the uranium front, just the opposite has happened. As you mentioned, physical uranium's been basically flattened. Do you think it's a more sophisticated market or a more informed market when you're looking at uranium and uranium mining stocks and investors willing to look forward and say, "Hey, we know this is coming, so let's start getting an allocation to the miners today." Why do you think that disconnect is there with what's happening in the uranium market, for say, gold and silver, as far as how the mining stocks perform relative to the physical itself?

John Ciampaglia: There are clearly periods where they disconnect from each other. There was a period in 2021 when the stocks got ahead of themselves, and then, for about two years, physical metal outperformed equities. However, that leadership changed hands once again about a year and a half ago. I think that's one of the reasons why most investors tend to own some proportion of their allocation in physical and some in equities, because it's very difficult to time which group is going to perform when. I think it's a good risk mitigation strategy to have a proportion of both.

I think the big takeaway from 2025 is the disconnect between the end users of uranium (i.e., utilities) and financial investors in uranium, which have very different behaviors. Investors have allocated a significant amount of capital to the space this year. There has been a lot of equity issuance, and a substantial amount of convertible debt has been issued.

Then, you contrast that with the physical market, where utilities are playing, which is the term market. For the first 10 months of the year, the term market was anemic. It was essentially dead because utilities just didn't seem to want to pull the trigger and enter into new contracts, given the numerous what-if scenarios related to whether there would be tariffs on uranium and other parts of the fuel cycle. Will there be trade restrictions? Will there be export taxes? What about the Section 232 review that is currently underway for uranium? What impact could that have?

What about this idea that the U.S. should resume building a strategic uranium reserve? That was a topic that emerged unexpectedly in September from the U.S. Department of Energy Secretary, which really got the market questioning: if the government steps in, could they start buying uranium? Could they establish a price floor for the metal to support U.S. domestic production?

People are trying to connect the dots here because an unconventional and aggressive energy policy is emerging from the U.S., where they are making equity investments in mining companies. They are providing substantial loans. They are engaging in offtake agreements for future production. They are employing a range of unconventional tactics to reshore these critical supply chains. The question I think many investors have is whether uranium will be the next metal where the government becomes more active in the U.S., and could this have an impact on the market?

From speaking with various market participants, it is interesting to note that nobody welcomes this intervention. The utilities don't want the government stepping in. The idea is that they will ultimately increase the price and force utilities to pay higher prices in the future. Even some of the key producers don't want the government to intervene in their market. It's going to be a 2026 item to look for.

Now I think you have to sit back and say, "What are they ultimately trying to do?" They are trying to mitigate supply chain risks, particularly from countries that are friendly today but may not be tomorrow. The U.S. is hugely dependent on other countries for all of its uranium. The uranium sector in the U.S. is slowly recovering after being essentially shut down, but a significant gap remains between annual requirements in the U.S. and annual production. That delta is approximately 46 or 47 million pounds per year.

It's a significant problem to solve, and I don't think it will be done overnight, but it's something we're looking for. We can envision announcements that are very aggressive in terms of this reshoring and restocking of uranium, which, in prior cycles, governments have historically stockpiled a wide range of critical materials, including uranium. That's one item we'll wait and see how it plays out.

Ed Coyne: I think it's interesting the way the market is playing this out, because there's an assumption that there's just stockpiles out there, and it's just deciding who wants it and when, when in reality, we're seeing more supply deficits happen even with existing producers out there. Some of the largest producers I saw earlier this year were having challenges continuing to operate at the same level and were certainly having difficulty trying to ramp up their production. Regarding supply and deficits, what's that looking like, and how will that most likely impact prices longer term as well?

John Ciampaglia: I just came from two bank-sponsored uranium mining conferences in the last few weeks, and so I got to sit on panels with uranium producers. The messaging is very clear. There is clearly a stalemate going on between the two parties. I mentioned that contracting has been anemic for the last 10 months of the year. Over the last four or five weeks, we've seen a slight increase in contracting volumes, but there's a clear disconnect between utilities that need to buy and producers who are reluctant to sell at prices that are too low. I would say that there's been a good stalemate here, and it's one of the reasons why we haven't had a lot of contracting volume.

Contracting volume is important because it sends signals to investors, and without those signals, many people have to look beyond. The reason investors are attracted to uranium is that these utilities can delay and defer as long as possible, but ultimately, they will have to pay up and buy. While there hasn't been much demand this year in terms of contractual renewals, that will be pushed into the future.

I'd like to put this into context for people. Last year, the industry signed contracts worth 110 million pounds for future delivery. Until October, we had only reached 48 million pounds per year. In November, we saw a significant spike, and we're currently sitting at around 82 million pounds per year. We'll see what happens in the last week or two of the year, but it's fair to say that we'll be below last year's number. What's more important is that the industry uses this theoretical benchmark of 150 million pounds as the number by which it replaces what it consumes. That's not the actual production, but it's a contracting rate that they believe approximates the replacement rate of contracting.

We’re a far cry from 150 million pounds this year, and we haven't really gotten into the cycle of replacing what we've consumed because utilities have been essentially delaying the purchase of new items for future delivery and have been comfortable working down their legacy inventories and contracts. At some point, there must be an acceleration of contracting, as the industry's SATs clearly indicate that billions of pounds of uranium need to be contracted for purchase over the next few years, which presents a significant challenge.

The industry, specifically the utilities, is very confident that a significant amount of new supply will come to market in time for when they need it. However, as you and I know, having worked at Sprott for as long as we have, uranium mining is not easy. We've seen just about every brownfield, meaning an existing mine that was put on care and maintenance, turned back on, has had growing pains. We also have the two largest producers in the world. They've experienced some production issues, but they've also signaled to the market that they're no longer interested in selling uranium at low prices. They are holding much more negotiating leverage than they've ever had, and this is why I use the word stalemate—who’s going to blink? So far, the key producers are really committed to this supply discipline strategy, where value is prioritized over volume.

Ed Coyne: Correct me if I'm wrong in this, but I think the cost of uranium into the overall operating budget of a reactor is like 5 or 7%. If that price even doubles, it's a relatively small amount of the overall cost of running that reactor. Is that maybe part of it? They don't care if it stays around $60, $70, or $80 a pound for now; if it goes to $110, so be it. Let's just wait and see who blinks first on that. Is that happening? As you talk to more of these companies, is this the typical way this business operates, or is this something new that we're identifying as we delve deeper into this market?

John Ciampaglia: The number one job for a utility is never to cut short fuel, and they are very good at managing the supply chain with very long lead times and purchase agreements to ensure that never happens. This is unlike the natural gas market, where a shock or disruption typically leads to price spikes. It's a very different market, but having said that, utilities are making record prices for electricity. Their customers are clamoring for more electricity, but, as you mentioned, a significant portion of that demand is driven by AI-powered data centers. They have not had to deal with this load growth before, and you're starting to see some of these tech companies take matters into their own hands.

They're signing deals with startup companies, existing companies, and incumbent utilities to ensure they have enough electricity, which is becoming one of the key bottlenecks that the investment community is recognizing in terms of these ambitious plans to build out a significant amount of AI data center capacity.

Electricity is going to be a key issue going forward. You're starting to see some conflicts arise between ratepayers and large industrial users, such as hyperscalers. There's pressure on electricity prices as new entrants enter the market and demand more energy for themselves. It will be an interesting dynamic going forward.

Ed Coyne: If you're paying attention, you see more, albeit sporadically, news articles and TV interviews coming out about people's utility bills going up. I do think that the AI and data center world is going to face a PR problem, as they're taking all the electricity. There will be a coming-to-roost moment where they will have to justify continuing to grow this AI data and other resources, competing for energy and the price will inevitably rise.

It feels like nuclear is at the front end of that. They're the ones who will solve that. They will want to be able to produce that 24/7 baseload energy. What do you think it will take for the world to wake up and say, in five years, we don't have enough, we need more. This price needs to increase to incentivize both existing mines and to invest in new mines that are coming online. What are some of the things that will need to happen for that to really start to move this price?

John Ciampaglia: I think the utilities are single-handedly betting that some of the new greenfield projects that have been in the permitting process for years are finally going to get over that hump, and we hope they do and start construction. If everything goes according to plan, a new supply will come online in four to six years. If there are any hiccups with any of those projects, I think it could be a very powerful catalyst to reinforce the reality with utilities that mine supply is tricky. Even the incumbents, the best miners in the world, have growing pains and issues when they try to restart mines and expand existing ones. At the end of the day, what the producers are telling their clients, and us, is that the incentive price simply isn't there.

Let's put it into context. The uranium price, currently around $78 per pound, seems remarkably inexpensive to us in comparison to historical levels. I say this because if we go all the way back to 2011, the uranium price was around $70. We saw a similar situation to the one you and I were just discussing with silver, where silver was stuck for years, trying to break free and surpass its old 2011 high. I recall the prices of uranium in 2011, which were around $70 and $78; it now seems incredibly cheap on a relative basis, given how much more expensive it is to mine anything in the world. I think that's one thing.

When you examine the uncovered requirements building in the pipeline, this represents essentially pent-up future demand; it's real. The question will become who will be covered and have the pounds available to them, and who will get caught short. We know it's always that marginal player that drives price discovery. It will be very interesting to see if next year we see a resumption of contracting by utilities. As I said, over the last couple of months, we've seen it come back to life, but we have a lot of catching up to do. I wouldn't be surprised if we see a catch-up trade in the price of physical uranium next year, as we did in gold and silver. This year, we saw this catch-up trade finally play out.

Ed Coyne: We've talked about the cost of extraction or the cost of production for an existing mine, and we have a couple of big players out there. As you mentioned earlier, they're even struggling to ramp up or to increase the volume there versus the cost of a new mine. Let's say we get this catch-up trade, and the new mines try to come online. What is that cost, and what time frame are we looking at? Will there still be a significant chasm between supply and demand dynamics because it's taking so long for these new mines to come online? What are some of the updated numbers you're seeing out there right now with the cost of production for existing versus new?

John Ciampaglia: It creates a bit of a disconnect between the producers and utilities. If you're a producer, you want to promote your project and company by highlighting the value of these deposits, the cost of capital expenditure to build the mine and the remarkably low operating costs. It will vary dramatically from project to project. Still, if you're touting you can produce uranium at $20 or $30 a pound on an ongoing basis, and you're a utility and you're seeing that, well, then you're saying the price of uranium shouldn't be much more than $80, right?

That's kind of a naive way to think of it. These projects have been in the making for years. Environmental permitting, feasibility studies, and construction involve numerous risks, hurdles and challenges that must be overcome. The reality is that not every project will come in on time in terms of its construction timeline. We will see when these pounds get to market.

I think governments around the world are finally acknowledging that the permitting timelines and processes have been too onerous, and certain projects are being identified as being of strategic or national interest. They're going to receive somewhat better treatment, but for the mines in the pipeline, it's kind of a moot point because they've just spent the last four years trying to obtain environmental permits.

We will see how these projects unfold, but it's fair to say that some uranium companies have stated that the current pricing environment is not supportive of building new mines. We have tier-one producers openly stating to the market that the uranium pricing signals and demand are insufficient to restart other mines that have been on care and maintenance for several years. Although we have a structural supply deficit that has been in place and is well understood, we still have a disconnect between responding to future demand and adjusting our commodity supply accordingly. It's been tepid. At some point, it will break, and our guess is that the utilities will blink first.

Ed Coyne: Someone's wrong, and someone's right in this whole equation. It seems like the market is recognizing that they're getting ahead of this. They're investing in the miners now, recognizing that as the price rises, and we see this all the time in gold and silver mining stocks, their margins continue to expand at a very high rate eventually.

John Ciampaglia: Yes. I think that if you examine the forward curve for the uranium price, as well as the price floors and ceilings for long-term contracts, they all signal that market participants believe the price is going up. If you consider the three- and five-year prices for uranium forward, they are well above the spot price. If you listen to Cameco, which I think provides us with the best transparency around floors and ceilings, they're now saying that the ceilings are upwards of $140 to $150 per pound, and the spot price is at $78. That tells you that the direction of travel is up.

Clearly, a disconnect is occurring, and the lack of physical purchasing activity for uranium has been one of the key factors holding back the spot price. The spot price to us right now feels very asymmetric. What I mean by that is it doesn't feel like there's a lot of downside to it because if the price were to sell off, there's a very large incentive for carry traders to come in, buy in the spot market, sell forward a year or two or three, and make a very good rate of return on that in a risk-free way.

That's why it feels as though the price is very well supported in the mid-$70s; however, the forward curves are indicating prices of $90 to $100. It feels as though the price wants to get there eventually.

Ed Coyne: If you follow the miners, it certainly looks that way. From a technological standpoint, it wasn't that long ago that many articles were discussing small module reactors and microreactors, which were driving the future of this demand. Before we even got into existing reactors extending their operating license, and new large reactors coming online. Any fun stats or updates you can give us on what's happening in the SMRs, the small module reactors, and/or even the micro reactors? Is there anything you've come across that might be worth sharing with our listeners?

John Ciampaglia: I think there's a ton of activity going on right now, and there's a lot of private capital coming into these companies. It is not guaranteed that all players will win. There are multiple designs, multiple companies and many of these are startups. The market will sort out the winners and losers here. I believe the trend is clear: this will be an emerging technology that complements large-scale reactors.

I think Western countries, particularly those that have not built significant new capacity in recent years, will dip their toe back into the water with these small modular and microreactor builds. Clearly, we have several announcements, including those from governments and hyperscalers, as well as very long-term power purchase agreements with a 20-year duration. Again, utilities need predictability, they need certainty and they need long-term contracts to make these long-term investment decisions. I believe hyperscalers are bringing significant capital to the space.

We won't see the first ones being operational until 2030 or 2031, but I think it's like a snowball effect. Once the snowball starts rolling downhill, it's really going to go. That's the same analogy with many new technologies that need to gain adoption, commercialization, and then ultimately build scale. There is, I think, tremendous support for doing this. I think the first ones we're going to see will be, not too far from the Sprott head office in Toronto, the Darlington nuclear power station, where they have already broken ground to build a number of these GE Hitachi SMRs.

It's coming, and a lot of investments are being made in parallel to ensure that these things have the necessary fuel, which is another significant challenge. We need to ensure we have the capacity for enrichment to provide the fuel for these investments. That's another area of focus.

Ed Coyne: John, as we wrap this up, I'd like to touch on a couple of things. As we close the book on 2025, what surprised you on the upside? What disappointed you this year, despite the many positive things that happened in our world? Give us one of each, and then I want to get an outlook for 2026 on what you think may or may not happen there, if you're comfortable with that.

John Ciampaglia: I think it's fair to say that 2025 was one of the most unusual years in financial markets and politics that I have ever witnessed in my 30-plus-year career. It saw numerous unusual and unconventional developments. We don't need to point out the primary source of those, but it was an absolute rollercoaster of uncertainty and very novel trade and tariff actions, and really a breakdown or a shift of the global order that has been in place since World War II. That is, as you consider it, an incredible shift across all capital markets and asset classes, with profound implications.

Now that the markets have settled down, I don't think those issues have gone away. They will continue to flash and create flashpoints in the markets, thereby creating volatility. I think that's the toughest thing for investors: you have conviction, you look at the fundamentals, you look at the numbers, and they make sense, but we've been in a very headline-driven market this year where a single statement or a single post on social media can really set markets into a tailspin.

I think for investors who kept their conviction, it was clearly the most profitable trade of the year. People who got shaken out obviously got washed out at the bottom, which was unfortunate. With respect to uranium, I think the rollercoaster range bound that we were in was frustrating because people are looking at the fundamentals and the numbers and saying it just doesn't make sense. How could this commodity be lagging relative to other commodities this year when it has such a bright future?

It's really about conviction. We often see a scenario where a commodity experiences a multi-year bull market, but along the way, it undergoes multiple 30-40% drawdowns, causing people to exit. Conviction is something very important to hold. Our conviction remains unwavering regarding the long-term prospects and fundamentals of the uranium industry.I think this year was a gift for people who missed the earlier move.

For next year, we're looking for a few key market signals. The contracting cycle needs to pick up to make up for lost time. There are clearly some additional details the market is seeking regarding what Section 232 means for uranium. This is the strategic review that is currently in progress. The U.S. government has made an $80 billion pledge to build a group of AP 1000 reactors from Westinghouse. There aren't many details, but it's a big, splashy announcement. Finally, it will be interesting to see if the idea of a strategic uranium reserve returns in the U.S. and how that may play out. I think those are things that we're looking for in the first few months of 2026.

Ed Coyne: We didn't even get into security and geopolitics. We primarily discussed supply and demand. You're right, that's a whole other ecosystem we could spend hours discussing, different countries trying to secure their own supply in order to fuel their future growth.

John Ciampaglia: Yes. I read an interesting statistic the other day that states 75% of the elements on the periodic table are now considered critical materials by the U.S. Geological Survey.

If you consider how much interest in national security or energy security these materials generated three years ago, it was minor. It encompasses everything from rare earths to uranium, silver and copper. That list is quite telling in terms of how fixated governments are on the resiliency of supply chains when it comes to defense industries, high-tech industries, AI, and these critical materials. They are going to have a disproportionate share of focus going forward, after largely being ignored for the last 10 or 15 years.

When you look at the price charts for a lot of these metals that we're talking about, they went nowhere for 10 or 15 years. Nobody cared. There was no incentive pricing, and no capital was being invested in these sectors. Nobody wanted to invest in them. Everybody was more than happy with China controlling 80% to 100% of the supply chains. Think about how radically that narrative has flipped upside down in the last 18 months.

Ed Coyne: That's a great spot to end this on because that's a thought-provoking point you just made. Before we go, is there anything you'd like to discuss that I didn't bring up? I couldn't think of all the great questions to ask, so is there anything else you'd like to leave the listeners with that I didn't cover?

John Ciampaglia: 2025 was a banner year for most commodities, particularly the ones that Sprott is involved with. I would like to conclude by thanking our clients for entrusting their capital to us. We work incredibly hard to manage these funds. They're not easy funds to manage when you're talking about physical metals across multiple markets and types. We take great pride in managing money for our clients, and it's truly all about their success. I think most of our clients had a successful 2025. Thank you to all of them, and thank you for entrusting us with your capital.

Ed Coyne: Thank you, John. It's been 10 fun years that you and I have been fortunate to work together, and I'm looking forward to what 2026 brings for both of us, the entire firm, and all our investors. Thank you for that. Thank you all for listening to Sprott Radio.