Uranium Week: Cusp Of A New Contracting Cycle

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An upcoming bi-annual report from the World Nuclear Association could be the trigger for utilities to restart a U308 contracting cycle.

-Fermi America and Texas Tech launch 11GW nuclear-powered AI campus
-World Nuclear Association report seen as catalyst for U308 contracting cycle
-Petra Capital highlights uranium supply constraints and top ASX stock picks

By Danielle Ecuyer

When the AI narrative colllides with nuclear energy demand reality

By now most readers would appreciate the proposition that aligns the longer-term growth in demand for clean energy, including the role nuclear power will play, and the growth in electricity demand from AI-related data centres.

The week past evidenced how the narrative is becoming reality, with Texas Tech University System and Fermi America announcing the launch of the “hypergrid”, an advanced energy and intelligence project for the world’s largest energy-driven AI campus.

Up to 11GW of power will be sourced from nuclear, four 1GW Westinghouse AP1000 reactors; six Siemens SGT800 gas turbines; three GE Frame class industrial gas turbines, and 1GW of solar, with 1GW of power expected to come online in 2026.

The complex will be built on a 5,800-acre site which is adjacent to the Department of Energy’s Pantex nuclear weapons facility. The site is also located near one of America’s largest gas fields.

The nuclear portion of the project will be developed in conjunction with Hyundai Engineering & Construction. Fermi expects to generate revenue through long-term take-or-pay lease agreements with hyperscale AI data centre tenants and is in discussion with the top twenty AI companies.

As a reminder, McKinsey forecasts AI data centre power demand to grow to over 80GW by 2030 from 25GW in 2024, which will require additional investment of more than US$500bn.

Fermi’s project is notable for the aim to install 2.5GW of small modular reactor capacity when the technology has evolved and matured.

Is the stage set for a new U308 contracting cycle?

Petra Capital recently took the opportunity to pen their view on how the upcoming bi-annual World Nuclear Association report, to be unveiled in London on September 5, could spark a new contracting cycle with a resulting price response in U308 markets.

Since the most recent 2023 report, which saw the U308 price rally sharply after release, the analyst points to multiple demand drivers for the fuel which have since come to the fore. Importantly, the report holds sway with the industry and ancillary utility users, since the demand-supply outlook is represented via “considered opinion of multiple trusted contributors” from within the industry.

Post the September 2023 report, the standout longer-term demand driver, as outlined with the Fermi example, is the significant growth in projected demand for clean power from AI-data centres since the release of ChatGPT in November 2022.

Microsoft, Google, Amazon, and Meta are all inking deals for nuclear power supply to support their AI-related goals.

Petra is keen to re-state again additional changes to the industry from a macro perspective, including the removal of a ban on nuclear financing by the World Bank; the repeal of the Nuclear Exit Act by Belgium, and the classification of nuclear power as a clean energy source akin to renewables by Germany, as but a few examples of the shifting dynamics to support nuclear power.

India has also targeted 100GW (from 7.9GW) by 2047, China 200GW (from 56.9GW) by 2050, the US 385GW by 2050 (from 96.9GW), and France to 90GW (from 63GW) by 2050.

While the demand outlook has risen since 2023, the supply side dynamics have failed to improve. Arguably, the analyst proposes supply is “indisputably” lower than expected in 2023.

Kazatomprom has delayed project ramp-ups, Niger has experienced a coup with Orano losing its operations; NexGen’s ((NXG)) start date for its 29mlb Rook I project has been deferred until 2030 from 2027. Boss Energy ((BOE)) is conducting a new study to determine the viability of the Honeymoon ramp-up to 2.45mlbs in 2027 and beyond from 1.6mlbs, Peninsula Energy ((PEN)) has cancelled 5.1mlbs of offtake contracts with delay in the start of the Lance project.

Cameco, Deep Yellow ((DYL)), and Bannerman Energy ((BMN)) will not bring on new supply at the current contract pricing.

Cameco reported it has seen bids in the term market seeking floors for U308 price in the mid-US$70’s and ceilings around US$130/lb as at June quarter this year.

Putting the pieces of the proposition together, Petra argues the upcoming report from the World Nuclear Association —Global Scenarios for Demand and Supply 2025-2040– will prove to be the trigger to recommence the uranium contracting cycle.

The current length of the fuel cycle means utilities are already looking out to 2028 requirements. Boosting the potential for a new fuel cycle, the analyst proposes another signal comes from the US’s largest electricity interconnection network, PJM (Pennsylvania, New Jersey & Maryland). The network capacity auction has delivered a 22% rise in power prices in recent times. PJM is also the largest global consumer of uranium via nuclear power supply.

Higher power prices for the utilities are figuratively a “green light” for a commitment to higher-priced term contracts, as per the PJM example.

On balance, a confluence of factors could see the upcoming industry report instil higher U308 prices, which would be supportive of the uranium sector.

Petra sees the most upside in stocks like Aura Energy ((AEE)) as potential producers.

Petra’s top picks in the U308 sector

Aura remains Buy rated for Petra with a 40c target price, with the company likely to be the ASX’s first greenfield producer when 2027 production is slated to commence for its Tiris Mauritania project.

Bannerman has Etango, a large greenfield project in Namibia, with $85m recently raised and a final investment decision slated for December. Buy rated, target set at $5.30.

A restart at Kayelekera is expected in the September 2025 quarter, with Lotus Resources ((LOT)) recommissioning the precipitation, drying, and packaging circuits. Buy rated. Target set at 30c.

While NexGen Energy remains the most strategic in the sector, the next stock trigger could arise with Federal Approval, the final hearing in February 2026.

Petra has an exploration value of $2,816m, which reflects the “robust” exploration results at Patterson Corridor East and the high probability of further deposits yet to be discovered on the company’s tenements. Buy rated. Target $17.12.

The summertime blues hit spot market volumes

Industry consultants Trade Tech reported the U308 spot price rose US$0.50 to US$72lb and is down -11.7% over the last year and down -5.3% year-to-date, despite Sprott Uranium Trust (SPUT) entering the market post a US$200m equity raising.

Petra asks the question: with the 30-day agreement to not issue further equity post its recent placement now finished, and with uncovered requirements of 3.2mlbs of U308m, can utilities afford to assume Sprott will not raise more capital and enter the market again?

Nevertheless, it was a quiet summer’s week on the spot market, TradeTech notes two transactions totalling 150klbs. One on Tuesday for 50klbs at US$72.50 for delivery at Orano’s Comurhex facility and one on Friday for 100klbs for September delivery at US$72lb to Cameco’s Canadian facility.

One non-US utility entered the market with a new long-term Request for Proposals. TradeTech believes concerns over further tariffs against Russia are overhanging the market, which is reflected in the smaller than usual volumes transacted at 50klbs instead of the standard 100klbs.

The TradeTech Mid-term price indicator came in at US$77lb and Long-term price indicator at US$82lb.

Focusing in on the latest short positions, as obtained from ASIC dated August 5, Boss Energy at 19.67% retains the crown for the number one short position, followed by Paladin Energy at 17.80%, up from 17.14% and 17.35%, respectively, a week earlier.

Deep Yellow sits in twelfth position with 8.41% of capital shorted, and Lotus Resources ((LOT)) at 8.16%.

For more U308 weekly updates, check out the latest from FNArena:

https://fnarena.com/index.php/2025/08/05/uranium-week-supply-challenges-are-mounting/

https://fnarena.com/index.php/2025/07/22/uranium-week-utilities-swing-into-gear/

https://fnarena.com/index.php/2025/07/15/uranium-week-sprott-bump-no-more/

https://fnarena.com/index.php/2025/07/08/uranium-week-u3o8-spot-price-poised-to-fall/

Uranium companies listed on the ASX:

ASX CODE	DATE	LAST PRICE	WEEKLY % MOVE	52WK HIGH	52WK LOW	P/E	CONSENSUS TARGET	UPSIDE/DOWNSIDE
1AE	08/08/2025	0.0600	0.00%	$0.09	$0.03
AEE	08/08/2025	0.1700	6.25%	$0.19	$0.10
AGE	08/08/2025	0.0200	0.00%	$0.05	$0.02		$0.070	250.0%
AKN	08/08/2025	0.0100	0.00%	$0.01	$0.01
ASN	08/08/2025	0.1100	– 8.33%	$0.13	$0.04
BKY	08/08/2025	0.5100	– 3.57%	$0.67	$0.31
BMN	08/08/2025	2.5600	2.79%	$3.68	$1.76		$4.700	83.6%
BOE	08/08/2025	1.7900	8.33%	$4.75	$1.68	-189.8	$2.569	43.5%
BSN	08/08/2025	0.0200	0.00%	$0.04	$0.01
C29	08/08/2025	0.0200	0.00%	$0.13	$0.01
CXO	08/08/2025	0.1100	0.00%	$0.14	$0.06		$0.110
CXU	08/08/2025	0.0100	0.00%	$0.03	$0.01
DEV	08/08/2025	0.0800	0.00%	$0.21	$0.07
DYL	08/08/2025	1.5400	0.64%	$1.87	$0.75	-306.0	$1.940	26.0%
EL8	08/08/2025	0.2400	– 3.85%	$0.42	$0.19
ERA	08/08/2025	0.0020	0.00%	$0.02	$0.00
GLA	08/08/2025	0.0100	0.00%	$0.02	$0.01
GTR	08/08/2025	0.0040	0.00%	$0.01	$0.00
GUE	08/08/2025	0.0600	0.00%	$0.10	$0.05
HAR	08/08/2025	0.0800	14.29%	$0.09	$0.03
I88	08/08/2025	0.2300	11.76%	$0.72	$0.08
KOB	08/08/2025	0.0300	0.00%	$0.18	$0.03
LAM	08/08/2025	0.6500	– 9.72%	$0.90	$0.48
LOT	08/08/2025	0.1600	0.00%	$0.32	$0.13		$0.328	104.7%
MEU	08/08/2025	0.0400	0.00%	$0.06	$0.03
NXG	08/08/2025	10.5900	4.59%	$13.53	$6.44		$12.925	22.0%
ORP	08/08/2025	0.0300	-25.00%	$0.07	$0.02
PDN	08/08/2025	6.6100	5.56%	$13.27	$3.93	-74.4	$8.693	31.5%
SLX	08/08/2025	3.8700	– 9.40%	$6.62	$2.28		$6.500	68.0%
TOE	08/08/2025	0.1900	0.00%	$0.36	$0.15
WCN	08/08/2025	0.0300	0.00%	$0.04	$0.01

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