Uranium’s Supply Crunch Is Getting Worse — And Prices Could Go Much Higher

Justin Huhn · Uranium InsiderBullish

Google deal de-risks Constellation's fleet, but the stock's jump outruns the deal's substance.

The Google deal adds roughly 800-plus MW through upgrades at 11 existing Constellation reactors, with over $4 billion going into steam generators and turbines. Huhn says these upgrades don't meaningfully add uranium demand, so the direct uranium effect is small. The headline still de-risks Constellation's operating fleet and makes it more likely the company pays up for fuel because hyperscalers will buy its power. He calls it bullish for the space, but says the size of the move reflects short covering after very poor sentiment rather than the deal's details.

“these upgrades don't actually equal significantly more uranium demand... But narrative wise, it's it's a very, very bullish headline.”at 3:18

Justin Huhn · Uranium InsiderBullish

GE Vernova's BWRX-300 SMR is a likely major winner given its deal pipeline.

GE Vernova's BWRX-300 is already under construction in Darlington, Ontario, with multiple deals, and it is expected to build one at the Clinch River site in Tennessee for TVA, which received early NRC construction approvals weeks earlier. Its deal pipeline is large, with daily incoming calls and site visits, so it should be among the handful of SMR winners clear to the market over five years. Huhn calls it an established, diversified company rather than a pure play, so it is a lower-risk way to hold SMR exposure.

“One big obvious one, I think, is GE Vernova with their BWRX 300 design... Already building the first... First one of those in Darlington, Ontario”at 45:22

Justin Huhn · Uranium InsiderBullish

X-energy is among the leading US SMR developers and nearest to an early site permit.

X-energy's XE-100 is one of two US demonstration projects in advanced nuclear, alongside TerraPower's Natrium. It has a planned 10 to 12 reactor plant in Washington state for Amazon, backed by Amazon's investment, and a deal with Dow Chemical in South Texas. Huhn believes it is closest to an early site construction permit, which he expects in Q1 of next year. He lists it among the three big US SMR players.

“XEnergy also has a deal with Dow Chemical in South Texas. That's the nearest to getting their early site construction permit, which we believe is going to happen in Q1 of next year.”at 47:01

Justin Huhn · Uranium InsiderBullish

BWXT is an extremely solid nuclear picks-and-shovels company left for dead.

Nuclear picks-and-shovels stocks like BWXT have been left for dead even though they are solid established companies. The nuclear utility stocks have fallen 20 to 30 percent or more from their highs, and the sector was wiped out this year. Huhn sees these larger caps, some of which pay dividends, as a no-brainer to hold in a mixed basket of nuclear exposure. BWXT also has its own SMR design, which he mentions separately.

“There's other picks and shovels companies in the nuclear space that have been left for dead that are extremely solid companies like BWXT, like Amentum”at 48:21

Justin Huhn · Uranium InsiderBullish

Amentum is an extremely solid nuclear picks-and-shovels company left for dead.

Amentum is one of the nuclear picks-and-shovels companies that have been left for dead despite being extremely solid. Nuclear sector stocks, including the utilities, have fallen 20 to 30 percent or more from their highs this year. Huhn sees these larger, established names as a sound mixed-basket holding in nuclear exposure, as opposed to very risky small-cap SMR names.

“There's other picks and shovels companies in the nuclear space that have been left for dead that are extremely solid companies like BWXT, like Amentum”at 48:21

Justin Huhn · Uranium Insider

US reactor life extensions to 80 years de-risk the existing fleet and are a major uranium tailwind.

About 25-30% of the US fleet has applied for 80-year licence extensions, and operators plan to take their fleets to 80 years, possibly 100. The average US reactor is about 46 years old. Life extensions are spreading elsewhere, including France, Taiwan and Belgium. Huhn says his models have had to add 20-year extensions to almost every reactor expected to close between 2025 and 2035, which removes expected supply shutdowns from the demand picture.

“Probably 25, 30% of the fleet is already applied for eighty year life extensions. And if you ask the operators in The United States, they'll all tell you that they plan to take their fleets to eighty years.”at 5:58

Justin Huhn · Uranium Insider

Most of about 150 SMR designs are early; expects roughly six winners, so incumbent utilities are the easier bet.

About 70-90 companies are pursuing roughly 150 SMR designs, and most are still in permitting, licensing or pre-construction. Huhn expects about six primary winners and thinks a few are starting to emerge. For risk-reward, he prefers established utilities such as Vistra, Constellation, Duke or Dominion, which are easier to buy and more liquid. He notes that SMR stocks became meme stocks in late 2024 and early 2025, which he says is not a sound investment case.

“So in our estimation, there's going to be a half dozen primary winners of those designs.”at 8:54

Justin Huhn · Uranium Insider

Mine supply rose about 40% since 2021 and prices tripled, so the market now relies on mine output.

Direct mine supply has risen from about 120 million to over 170 million pounds in roughly five years, mostly from restarting brownfield projects. Over the same period prices tripled. Huhn argues this is not a supply-glut market like the one after Fukushima. Commercial and utility inventories have shrunk sharply since the 2010s, so there is no secondary buffer and the industry depends on pounds coming out of the ground.

“Now the industry is utterly reliant on pounds coming out of the ground because there isn't that secondary supply or inventory buffer like there used to be.”at 24:23

Justin Huhn · Uranium Insider

Energy security is driving a major reactor buildout, led by China, with Russia and India also expanding.

Huhn says the closure of the Strait of Hormuz during the Iran war highlighted how important energy is for sovereign security. China has about 40 reactors under construction, roughly half of the global total, and is also building heavily in solar and coal. Russia has about 23 reactors under construction abroad and is also a major uranium buyer from Kazatomprom, competing with utilities. India signed large uranium contracts with Kazatomprom and Cameco, and changed liability laws to attract international participation in its build-out.

“And China has 40 something reactors under construction right now. Almost half roughly... half of the reactors under construction globally are in China being built by the Chinese.”at 26:34

Justin Huhn · Uranium Insider

Community opposition is not a meaningful obstacle for US nuclear, especially at existing plant sites.

Only a few dozen US sites already have permitted plants where more capacity could be built, and nearby communities almost universally support these plants because they provide good jobs. Huhn gives Diablo Canyon in California as an example: the local community backs continued operation, and the plant holds NRC approval to 60 years. He says public opposition is not in the top 10 obstacles to building new US nuclear.

“I would argue it's not really an issue whatsoever in The United States right now.”at 30:57

Justin Huhn · Uranium Insider

Physical uranium is the best risk-reward; trusts trading at NAV discounts offer a good entry.

Huhn says holding uranium exposure directly is the least risky way to bet on higher prices. He points to the Sprott Physical Uranium Trust and Yellowcake, which trade at discounts to net asset value. The Sprott discount is about 8-9% now and widens to 15-16% in risk-off conditions. The trusts issue units and buy uranium when they trade above NAV, so a deep discount is an entry point. Spot looks to have a firm floor and shouldn't move much lower from here.

“the investment in the physical commodity, in my opinion, is probably the best risk reward proposition.”at 33:33

Justin Huhn · Uranium Insider

Uranium could reach at least $150-200/lb this cycle, possibly higher, in a very long secular bull market.

Huhn says supply and demand can be modelled with high confidence for five to seven years. Spot has a firm floor barring a nuclear accident or market meltdown. Price will be set by the last marginal pound and what buyers will pay, not by incentive prices, so he expects at least $150-200/lb this cycle, probably higher.

“So where is the price going to go? We believe it's going to go minimally to $150 to $200 a pound during this cycle and probably higher.”at 34:47

Justin Huhn · Uranium Insider

Long-term contract prices, not spot, are the better gauge, and contract terms favour sellers.

The long-term contract reference price is $96.50/lb, updated monthly. Most new term contracts reference the market at delivery with floors of $70-80 and ceilings around $150, so Huhn calls it a seller's market. Spot is thinly traded and mostly a surplus disposal market, with monthly trader offtakes from Uzbekistan often dumped into it. He says spot is noise but not irrelevant, and that traders are positioned for higher prices.

“the spot market is really kind of a surplus disposal market. It's where traders get some offtake from some production.”at 36:02

Justin Huhn · Uranium Insider

Term uranium market, not spot, gives the better signal; spot dislocations have been buying opportunities.

Term and spot uranium are linked by carry trades: traders buy spot, hold it and deliver to utilities years out, adding carry cost and profit, so large gaps are usually unsustainable. Last March and April the term price stayed flat around $80/lb while spot fell to about $64. Buyers stepped in on spot, and spot then rose two to three times from those levels, so the dislocation was a buying opportunity. The reverse case is a backwardated market where spot spikes while term stays flat during extreme risk-on buying; Huhn sees that as unsustainable and a chance to sell into the euphoria. Most volume trades in the term market, which he says gives a much better signal of what is coming, so investors should watch it more closely.

“But all of that is to say much more volume is done in the term market. It's the market that investors really should be paying more attention to because it gives you much more of a signal of what is to come.”at 39:02

Justin Huhn · Uranium Insider

Utilities buy uranium when needed, not as price bets, so there is little price arbitrage.

Huhn agrees that enrichment is bought before yellow cake, though it is not a hard rule. Utility fuel buyers manage inventories across the fuel cycle and generally buy what they need when they need it, so there is little price arbitrage. In the 2010s uranium was cheap and abundant, and utilities did not stockpile because budget committees and managers would not back a bet on price. Buying early and being wrong could cost a fuel buyer their job, so utilities act as non-contrarian buyers who rarely hedge.

“generally speaking, they buy what they need to buy when they need to buy it. So there's not a lot of price arbitrage.”at 40:19

Justin Huhn · Uranium Insider

Enrichment and conversion prices tripled to record highs, pulling demand for uranium.

After the Ukraine war and sanctions risk, many Western utilities stopped new business with Russia and bought enrichment and conversion from Western suppliers, because Russia is central to both. That buying pushed both prices to roughly triple in a few years, with conversion and enrichment at all-time highs. Enrichment and conversion both consume uranium (U3O8) as feed, so the rush for these services creates extra uranium demand, which Huhn calls a pull on uranium.

“And what we saw was the price of conversion and the price of enrichment essentially triple over just a few short years. All time high prices right now for both conversion enrichment.”at 42:22

Justin Huhn · Uranium Insider

Uranium is the coming bottleneck, with supply getting the least focus and most price impact.

Huhn cites UXC, the primary price reporter and fuel consultant, which says uranium is the biggest bottleneck in the coming years. Uranium has received the least attention over the past few years, so it should be the most price-impacted part of the fuel cycle for the next few years. The demand driver is global capacity, roughly 400 GW now and about 500 GW in five years, an enormous amount of new capacity hitting the grid. Huhn presents this as the reasoning behind his supply-crunch view, though the bottleneck claim is UXC's.

“the biggest bottleneck that we see in the coming years is uranium. It's had the least amount of focus in the last few years.”at 43:26

Justin Huhn · Uranium Insider

Small SMR pure-play stocks are very risky and a poor way to get nuclear exposure.

Pure-play SMR exposure is not the best option because the designers are unproven and many may not survive. Some of the smaller SMR companies are very, very risky, and Huhn would not put all his eggs in any one of them. A diversified basket of nuclear companies is a more sensible way to hold the theme, especially after the sector sold off.

“as far as as far as pure play exposure to the SMR story, it's not the best, you know, not the best option.”at 46:19

Justin Huhn · Uranium Insider

SMR and new nuclear end-uses are right-tail upside; models assume minimal SMR demand.

Huhn's models carry minimal SMR demand. Hundreds of SMRs following the first-of-a-kind and second-of-a-kind builds are not in the forecast, so any large SMR roll-out is right-tail upside. He sees the same for nuclear-powered shipping and nuclear power on the Moon, which he calls great if they happen but unmodeled. Because the core uranium thesis does not depend on these, the investment is more comfortable, and if they do not materialise nothing is lost.

“that's not in our models. Right? We have minimal SMR demand in our models. So it's all right tail if that snowballs.”at 50:38

Justin Huhn · Uranium Insider

Institutional outflows and retail capitulation in a small sector created a contrarian buying opportunity.

Uranium stocks were pulled into AI-adjacent factor baskets, so when AI sentiment softened, institutional money left. The sector is small, so retail investors then gave up as well. Huhn says the sector has repeatedly bottomed in seasonal troughs and rallied 15-25% on capitulation. He argues that buying into terrible sentiment has been a reliable strategy, and that the current sell-off is classic capitulation.

“the sector is so small that if institutional money even reduces, you see a lot of retail just kind of throwing in the towel.”at 19:45

Justin Huhn · Uranium Insider

Uranium trade is correlated with the AI build-out but not reliant on it; sentiment can move prices more than fundamentals.

Huhn says the nuclear and uranium trade is not reliant on the AI build-out, but it is correlated with it. Data-center demand is strongly bullish for the existing fleet, while new reactors built to supply data centers have not yet materialised. Sometimes narratives and sentiment move the markets more than the underlying fundamentals that connect AI and uranium. Huhn expects the connection to strengthen over the years.

“Oh, it's not reliant whatsoever, but it is correlated. And then sometimes the narratives and sentiment will move markets substantially more than the actual fundamental drivers”at 21:41

Justin Huhn · Uranium Insider

Hyperscaler offtake for new nuclear likely within 18-24 months; direct new-build demand not yet visible.

Next Gen Energy, developing the Rook 1 uranium mine in Saskatchewan, says hyperscalers are asking about potential future offtake. Huhn reads this as intent to be involved in new nuclear. Hyperscaler investments in SMR developers such as Amazon with X-energy, Meta with TerraPower and Google with Kairos also point that way. He says direct new capacity built to supply data centers hasn't happened yet, and he expects a headline about hyperscaler uranium offtake in the next 18-24 months.

“I do think that that headline is coming probably in the next eighteen to twenty four months.”at 23:05