APAC Focus: Uranium's Electric Dream

Nuclear power's renaissance has increased optimism on the uranium outlook. We agree longer term, with nuclear generation to lift by 59%/87% by 2035/40 in our base case, and 71%/120% in our upside scenario of nuclear generation tripling by 2050. Leveraging our proprietary incentive price model, we lift our long-term price +10% to USD 77/lb (real, 2035) as a result. But nearer term, our rebuilt demand-supply framework highlights that mine restarts, ramp-ups, and expansions, along with reduced physical buying, as outweighing demand. As a result, we are cautious and below consensus shorter term.

We are bearish near term, with deficits in recent years reducing as supply growth outstrips demand, reflecting: 1) restarts, 2) ramp ups, and Kazatomprom as acid supply normalizes; and 3) new projects. But into the 2030s, uranium demand accelerates due to: 1) decarbonization, 2) growing power demand, 3) renewables challenges; & 4) safer / cheaper reactors. We expect demand to overtake supply, and new projects will be needed longer term (and more so again in our upside scenario). Geopolitics may yet result in increasingly uncertain shifts in the nuclear fuel supply chain, which we are monitoring closely.

We forecast U3O8 at USD 65/76/73/lb across 2025/26/27e, ~5%-17% below prior forecasts, ~14-26% below consensus and vs spot at ~USD 64/lb. Our long-term U3O8 price of USD 77/lb (real, 2035) is +10% vs prior and +2% vs consensus.