April 22, 2025: We are seeing notable shift in behaviour from utilities

1. Quiet week, strategic moves
2. Mounting supply risks beneath a quiet uranium market
3. Paladin's production woes ripple through a tight uranium market

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Transcript

This week on Uranium Spotlight, supply risks mount beneath a quiet uranium market while Paladin suffers production and legal problems.

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Quiet Week, Strategic Moves

The uranium spot price inched up last week, rising from $64.55 to $65.20 per pound—its highest close in several weeks. While the market saw fewer transactions—just six deals confirmed, with volume dropping to just over half a million pounds—investor interest remains strong, especially as buyers anticipate a potential price rebound.

We’re seeing a notable shift in behavior from utilities. With the spot price dipping into the low $60s earlier this month, some utilities that had previously stepped back are re-engaging, sensing a near-term floor may have formed. In fact, utilities have now purchased over 75% of the volume they procured in all of 2024—just a few months in.

Even those not looking to boost inventories directly are pursuing carry trades, trying to lock in today’s lower prices for future delivery, with intermediaries stepping in to pick up material accordingly. These forward-looking moves point to a market that, while quiet on the surface, is preparing for the next leg up.

On the term side, formal demand remained subdued last week, but make no mistake—utilities continue to negotiate quietly behind the scenes. With uncovered requirements through 2030 and geopolitical risks still looming large, more term contracts are likely on the horizon.

So while last week’s price move may appear modest, the underlying activity tells a different story—one of strategic repositioning and growing urgency, especially among buyers who don’t want to get caught flat-footed if prices climb again.

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Mounting Supply Risks Beneath a Quiet Uranium Market

At the World Nuclear Fuel Cycle Conference held in Montreal two weeks ago, industry leaders raised a red flag about the growing difficulty of securing future uranium supply—even as global demand is set to rise sharply.

Now, some producers are still haunted by the memory of Fukushima, worried another major event could again derail nuclear growth. But let’s put that into perspective. While Fukushima certainly impacted sentiment, the real driver behind the slowdown in new reactor builds over the last 15 years wasn’t a lack of demand—it was the dominance of cheap natural gas. Gas-fired plants were faster, easier, and far cheaper to build than nuclear. But with the geopolitical aftershocks of Russia’s war in Ukraine continuing to constrain global gas markets, that dynamic has shifted. Those old barriers to nuclear development no longer hold.

And here's the real kicker—even if no new reactors were ever brought online again, we would still be looking at a looming crisis in uranium supply. That view was echoed at the Montreal conference. While many presenters pushed the potential shortfall into the 2030s, we believe the crunch is going to arrive much sooner. Why? Because there are tens of millions of pounds of uranium expected from future mines... but with no confirmed timelines for when those projects will actually deliver.

It’s a point worth emphasizing: it takes upwards of 15 years to bring a uranium mine from discovery to production. Meanwhile, in China, new reactors are now being commissioned in less time than that. Cameco’s CEO, Tim Gitzel, addressed this imbalance directly, noting that while Cameco is well-positioned for the changing supply-demand picture, “signals from customers are needed very soon” to justify the build-out of new capacity.

That urgency was shared by several speakers who pointed to the financial challenges of developing new mines—but one critical factor largely went unspoken: the lack of operational experience among many of the new uranium developers.

Take NexGen’s Rook I project, for example. It’s slated to be a cornerstone of future supply from Canada, with an ambitious target of 30 million pounds annually starting in 2030. But NexGen has never brought a mine into production. Any delay there—and let’s be realistic, delays are more common than not—would dramatically widen the already growing supply gap, particularly as other major mines near end-of-life.

Case in point: Cigar Lake, one of the world’s highest-grade uranium operations, is projected to wind down by 2036. That’s according to Jonathan Hinze, President of UxC, one of the top uranium market research firms.

And even Kazatomprom, the world’s largest producer, is flashing warning lights. Their Managing Director of Sales acknowledged that supply growth has been incremental at best—and much of the low-cost uranium that fueled the last cycle has already been mined.

Cameco’s VP of Marketing, Lisa Aitken, added that while the market is currently in a bit of a holding pattern due to uncertainty, that pause “cannot last.” Utilities are drawing down inventories, and once procurement resumes in earnest, that pent-up demand will likely drive a significant rebound in prices.

It’s also worth reminding investors that 95% of uranium is transacted through long-term contracts—not the spot market. While spot prices have hovered around $65 per pound, long-term contract prices remain closer to $80. That premium reflects what utilities are actually willing to pay to secure reliable supply.

In short: the market may feel quiet right now—but beneath the surface, the structural supply issues are building. When utilities return to the table, they’re going to be competing for fewer and more expensive pounds of uranium.

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Paladin’s Production Woes Ripple Through a Tight Uranium Market

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Paladin Energy is facing some serious headwinds this year—both operationally and now legally.

The company has been hit with a class action lawsuit in Australia. A group of investors claims they were misled after Paladin failed to meet its 2024 production guidance. The suit, now before the Supreme Court of Victoria in Melbourne, alleges that Paladin made misleading statements and breached its continuous disclosure obligations between June 27 and November 11 of last year.

Paladin plans to fight the allegations in court.

This all ties back to Paladin’s flagship Langer Heinrich Mine in Namibia. After restarting operations, the company initially projected 2025 production between 4 to 4.5 million pounds of U₃O₈. But by November 2024, that guidance was revised down to between 3 and 3.6 million pounds. Then came the knockout—heavy rains triggered prolonged delays at the mine, and in April 2025, Paladin revoked its guidance altogether.

The bigger issue? Langer Heinrich is their only producing asset. The company does have other projects in the portfolio, but none are close enough to production to cushion the impact of Langer Heinrich’s underperformance. With falling revenue from lost production, rising costs from mine repairs, and now a major lawsuit on its plate, Paladin’s overhead is growing fast.

To make things more complex, Paladin recently closed its acquisition of Fission Uranium Corporation. That deal faced intense scrutiny from the Canadian government, largely due to national security concerns—both Paladin and Fission had Chinese shareholders. In the end, Paladin was forced to agree that uranium from Fission’s Patterson Lake South project, still in development, will not be sold to Chinese customers.

That’s a major concession. Right now, China is driving much of the growth in uranium demand—and by the time Patterson Lake South is in production, China could well be the world’s largest buyer of natural uranium.

So here’s the question: What does this mean for Paladin’s future? Can Langer Heinrich bounce back? Will Patterson Lake South deliver returns despite sales restrictions? And what happens to Paladin’s other mothballed or undeveloped mines if financing gets tight?

These aren’t just Paladin’s problems. In a market already defined by thin supply and long lead times, disruption from a key player can add serious volatility.

The uranium market is tight—and until financing loosens and higher prices unlock new production, it’s only going to get tighter.