Uranium Week: Outlook For 2025

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The uranium spot price fell on a lack of buyers as year end approaches, while broker’s debate the demand/supply outlook for 2025.

-UBS is sanguine on U308 in 2025
-Santa’s uranium buyers haven’t materialised 
-Lower price targets don’t reflect the share price value

By Danielle Ecuyer

Uranium price outlook

UBS has flagged a more conservative outlook on the uranium price for 2025, following a decline in the U3O8 spot price of -15% in 2024 as buyers have largely remained on the sidelines. A similar proposition is put forward by the broker for the upcoming calendar year, as a shift in the demand/supply outlook now looks unlikely.

UBS lowers its uranium price forecast by -9% to US$78/lb for 2025 and by -6% to US$80/lb for 2026. The COP 29 nuclear announcements are perceived as more “incremental in nature” than structural for the global uranium outlook. While the flagged push by Big Tech into nuclear-powered solutions for growing AI power demands is highlighted as a sentiment boost, the impact on near-term demand is considered questionable.

In 2025, UBS expects global growth in nuclear reactors, with an accompanying increase in uranium consumption of around 3-4%, led by China and India. Supply growth is forecast to expand between 6-7%, including a rise in Kazatomprom’s volumes of 12%, with added volumes from Paladin Energy ((PDN)) and Boss Energy ((BOE)).

Other factors that may play a role include the potential impact of a Trump presidency, risks from Nigerian supply, which represents around 4% of global supply, ongoing geopolitical tensions between the US and Russia regarding trade sanctions, and how NextGen Energy‘s ((NXG)) contracting activity unfolds.

Morgan Stanley’s latest commodity update highlights an expected increase in contracting activity for 2025 with the market poised to remain in deficit for the year. This broker forecasts the U3O8 spot price to rise to US$90/lb by 2Q 2025.

Canaccord Genuity has highlighted reports Canadia is considering a US uranium export tax in response to President Trump’s tariff threats.

The Canadian government is apparently considering export taxes on commodities including uranium, oil, and potash. Canada is the largest source of nuclear fuel for US power plants, with 25% of supplies coming from Canada.

The Week That Was for Spot Prices

TradeTech continues to observe U3O8 spot price volatility. Four transactions occurred on Tuesday, with the spot price vacillating by US$0.75/lb as sellers sought buyers for December settlement to meet some end-of-year financial goals. The industry consultants note sellers retreated on Thursday in response to reports the Canadian government was considering export tariffs to the US.

Saskatchewan Premier Scott Moe stated export taxes “are the wrong approach, and Saskatchewan will vehemently oppose the federal government imposing export taxes on our potash, uranium, or oil.”

By Friday, the spot market had moved past these reports, with one transaction conducted at US$76.50/lb for delivery to Honeywell’s ConverDyn facility in Illinois. A non-US utility continues to seek one “reload” of enriched uranium product for delivery in December or January, TradeTech highlights.

TradeTech’s weekly U3O8 spot price indicator fell -US$0.25/lb to US$76.50/lb, down -8% on last month and around -17% for 2024. The consultant’s mid-term U3O8 price indicator is US$83/lb, and TradeTech’s long-term price indicator is US$82/lb.

Reportedly, a new ship is expected to arrive in St. Petersburg in the next few days, and enriched uranium that has yet to leave for the US is expected to be loaded on this ship, with US parties confident the appropriate paperwork and permits will be in place.

What the Brokers Are Saying

Petra Capital reiterates its Buy rating on Lotus Resources ((LOT)) with a 36c target price following the release of revised capex for the restart of the Kayelekera project in Malawi.

The company is focusing only on items essential for the restart, with expected capex reduced by -43% to US$50m, along with a further US$11m in pre-production costs, compared to US$88m previously. The change also shortens the refurbishment timeline to 8-10 months from 12-15 months. Expected first sales are flagged for 2026, totaling 1.8mlbs of U3O8.

On revised spot uranium price assumptions and production impacts, such as water issues for Langer Heinrich, UBS lowers Paladin’s earnings forecasts by -30% in FY25 and -10% in FY26. The target price slips -5% to $9.90, but the analyst highlights the share price has retreated -55% from 2024 highs.

Paladin continues to hold the largest short interest on the ASX at 16.03%, up from 15% a week earlier.

Morgan Stanley retains a Buy-equivalent rating on Paladin, with its target price declining to $10.50 from $12.30.

UBS also downgrades Boss Energy’s earnings forecasts by -17% in FY25 and -6% in FY26 due to changes in its uranium price outlook. The analyst notes Boss’s Honeymoon ramp-up is proceeding more smoothly than Paladin’s. The broker’s target price slips -3% to $3.40. Buy rating retained.

Morgan Stanley has a Hold-equivalent rating on Boss, with a target price of $5.80, down from $6.70.

Bell Potter has applied more conservative cost estimates which reduces its target price by -$1 to $4.70 for Boss. As the second most shorted stock on the ASX at 14.24%, this broker suggests investors holding short positions at this level risk being squeezed if neither costs nor production disappoint. The stock is Buy rated.

Macquarie cuts Boss’s earnings forecasts ahead of the company’s cost update in January, with this broker now expecting higher operating costs for Honeymoon at US$27/lb compared to US$13/lb previously. Inflation in power, labour, and reagents are the main factors cited driving higher operating costs.

This broker now forecasts a loss for FY25 and lowers its target price by -2% to $4.50. Buy-equivalent rating retained.

Uranium companies listed on the ASX:

ASX CODE	DATE	LAST PRICE	WEEKLY % MOVE	52WK HIGH	52WK LOW	P/E	CONSENSUS TARGET	UPSIDE/DOWNSIDE
1AE	13/12/2024	0.0500	0.00%	$0.19	$0.03
AEE	13/12/2024	0.1550	3.33%	$0.31	$0.11
AGE	13/12/2024	0.0400	– 2.63%	$0.08	$0.03		$0.100	150.0%
AKN	13/12/2024	0.0100	0.00%	$0.05	$0.01
ASN	13/12/2024	0.0600	– 4.92%	$0.17	$0.06
BKY	13/12/2024	0.3300	– 5.88%	$0.45	$0.26
BMN	13/12/2024	2.8600	9.45%	$4.87	$1.90		$7.400	158.7%
BOE	13/12/2024	2.4400	2.35%	$6.12	$2.38	21.1	$3.883	59.2%
BSN	13/12/2024	0.0150	-11.76%	$0.21	$0.02
C29	13/12/2024	0.0900	0.00%	$0.13	$0.06
CXO	13/12/2024	0.0900	– 2.27%	$0.36	$0.08		$0.090
CXU	13/12/2024	0.0100	0.00%	$0.06	$0.01
DEV	13/12/2024	0.1000	2.04%	$0.45	$0.10
DYL	13/12/2024	1.2300	3.64%	$1.83	$0.91	-68.3	$1.900	54.5%
EL8	13/12/2024	0.2800	7.14%	$0.68	$0.26
ERA	13/12/2024	0.0020	0.00%	$0.08	$0.00
GLA	13/12/2024	0.0100	0.00%	$0.04	$0.01
GTR	13/12/2024	0.0030	33.33%	$0.02	$0.00
GUE	13/12/2024	0.0600	0.00%	$0.18	$0.05
HAR	13/12/2024	0.0400	-20.00%	$0.28	$0.03
I88	13/12/2024	0.4900	– 4.00%	$1.03	$0.14
KOB	13/12/2024	0.0800	14.29%	$0.18	$0.07
LAM	13/12/2024	0.7700	2.67%	$1.04	$0.48
LOT	13/12/2024	0.2000	– 8.70%	$0.49	$0.20		$0.547	173.3%
MEU	13/12/2024	0.0400	0.00%	$0.06	$0.04
NXG	13/12/2024	11.9000	– 5.53%	$13.66	$7.89		$16.600	39.5%
OAR	13/12/2024	0.0400	300.00%	$0.04	$0.01
ORP	13/12/2024	0.0400	0.00%	$0.12	$0.03
PDN	13/12/2024	7.6600	6.43%	$17.98	$6.83	37.0	$11.840	54.6%
PEN	13/12/2024	1.1200	5.36%	$1.23	$0.05		$0.240	-78.6%
SLX	13/12/2024	5.3700	1.23%	$6.74	$3.35		$7.200	34.1%
TOE	13/12/2024	0.2300	– 2.22%	$0.70	$0.19
WCN	13/12/2024	0.0200	0.00%	$0.03	$0.01

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