Uranium entering multi-year structural bull market: report

The global uranium market is entering a “tipping point” where sustained demand for the energy fuel and supply constraints could lead to a significant rally in prices in the coming years, according to analysts at Teniz Capital.

In a research report published this week, the Abu Dhabi-based investment bank said the entire sector is undergoing what they call a “second nuclear renaissance” — where accelerating demand from tech giants for data centers and global energy policy are helping to form a multi-year demand cycle.

Meanwhile, the supply side has reached what analysts believe to be an “acute” structural deficit that’s incapable of meeting this demand due to the slow pace of mine development. This situation, as the report warns, would only worsen, with demand projected to rise 28% by the end of this decade and double by 2040.

Drawing historical parallels with the mid-2000s, analysts at Teniz Capital sees uranium as one of the “most promising plays” in the energy sector, forecasting prices to rise by three or even four-fold.

‘Structurally short’

According to the bank, the world’s supply of primary uranium is falling “structurally short” of nuclear reactor demand due to years of underinvestment. It is estimated that mines can only cover about 74-90% of current needs, and that deficit would likely grow as countries continue to vie for energy security.

In the past, that gap could be filled by secondary sources — commercial inventories and reprocessing — but now these have largely been depleted as well, Teniz Capital said.

This situation is that the current project pipeline is effectively exhausted and development of new mines could take at least 10 to 15 years, it added.

As such, analysts said the uranium has now entered a “long-duration structural bull market” that they believe is time-embedded rather than cyclical. This, as they pointed out in the report, is reflected in the rally in prices, which bottomed at around $18 per lb. in 2016–2017 then surged to a 17-year high of $106 in early 2024, before stabilizing in the $73–80 range by year-end.

“The supply deficit in the 2030s is already programmed. It cannot be eliminated by any political decisions or investments. The physical constraints of time are insurmountable,” the report said, warning that even higher uranium prices would not offer a quick fix.

“This uranium cycle differs materially from past commodity upswings because supply elasticity is structurally low while demand is policy-driven and non-discretionary,” Ben Elvidge, product lead at Uranium.io, said in an email to MINING.COM.

Kazatomprom uniquely positioned

Against this backdrop, Teniz Capital has identified Kazatomprom (LSE: KAP), the world’s largest producer and seller of natural uranium, as a key player that holds a “unique and effectively irreplaceable position” in the global supply chain.

In its report, the bank highlighted the Kazakh company as the industry’s single-largest resource holder, accounting for about 39-43% of the world’s production. In addition, the Central Asian nation has more than 65% of global reserves suitable for in-situ recovery (ISR), the world’s lowest-cost extraction method.

In addition, a review of the global development pipeline shows that no project in Canada, Africa or elsewhere approaches Kazatomprom’s scale or economic efficiency. The most advanced alternatives are either too small, too costly, or too early-stage to materially alter the supply outlook, the report said.

The analysis also highlighted that the London-listed Kazatomprom offers diversification opportunities through its involvement in uranium projects with other major players, such as Cameco (TSX: CCO; NYSE: CCJ) and France’s Orano.

“Within this framework, Kazatomprom represents a rare example of a systemically critical producer for which no comparable global alternative exists over the next two decades,” the report said.