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This story features PALADIN ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: PDN
January ended on a slow note as Canadian import tariffs and DeepSeek disruption concerns weighed on buyer sentiment
-U308 market deflates
-Canada tariffs a hot potato
-What the brokers are saying
-Short positions grow in Australian uranium stocks
By Danielle Ecuyer
Macro concerns undermine buying interest
The U3O8 spot price market was not immune to the tariff whims of President Trump and the technology sell-off on the back of China’s DeepSeek revelation, causing consternation around the investment spend on nuclear energy to power data centres.
On January 27, industry consultants TradeTech noted the U3O8 spot price fell to US$67/lb with confirmation US import tariffs would be imposed on China, Canada, and Mexico.
At day end, deals were recorded at US$72/lb for delivery in the US, while material for delivery outside of the US was available at US$69.75/lb.
TradeTech states the drop in the U3O8 spot price attracted utility demand in the mid-term delivery market, while market participants were seeking more details and information on the proposed tariffs, announced on February 1.
As of January 31, TradeTech highlights 4.3mlbs of U3O8 was available for sale against inquiries to purchase of 0.5mlbs, and the consultant’s spot price ended the week and the month at US$71.25/lb compared to US$73.50/lb as of December 31.
TradeTech’s Mid-Term U3O8 price indicator fell from US$78/lb as of December 31 to US$76/lb at January 31. The consultants’ long-term price indicator remained unchanged at US$82/lb over the month of January.
It was only one year ago the U3O8 spot price achieved a 16-year high of US$100.50/lb, since declining on average each month by -2.7% to US$71.25.
Year-to-date the U3O8 spot market has recorded 21 sales equivalent to 2.2mlbs, TradeTech details.
On the cost front, TradeTech’s monthly production cost indicator (PCI) experienced a third consecutive increase since October 2024 to US$58.60/lb at month-end. The January PCI value is up 3.4% or US$1.90 from a year earlier at US$56.70. It is the highest value since TradeTech initiated this indicator in April 2020.
Trump targets Canada
Canada is the largest source of minerals imports to the US, including uranium, aluminium, nickel, steel, copper, and niobium at US$47bn in 2023 eclipsing China at US$28.3bn.
Any impacts would thus be significant for the defence, nuclear energy, and heavy manufacturing industries. In 2023, US nuclear utilities used 32mlbs of imported U3O8, and Canada was the main source of delivered product at 27%.
At the time of writing, the proposed 25% tariffs were due to be imposed on Canada and Mexico on Tuesday, February 4.
World’s largest U308 producer reports quarterly update
Kazatomprom reported December quarter production of 15.6mlbs of U3O8, a rise of 12% year-on-year. Sales over the quarter declined -14% to 13.1mlbs, as the company boosted inventories and sold higher levels of enriched uranium to the Kazakh-Chinese Ulba-FA joint venture.
The company anticipates production for 2025 to come in around 65mlbs-68.9mlbs of U3O8 with sales of circa 36.4mlbs-39mlbs.
Sector Analysts’ Updates
Paladin Energy ((PDN)) remained in focus post the company’s 2Q25 activities report. Macquarie points to ongoing disappointing grades from stockpiles. Management is planning to start mining again in July.
With the completion of the Fission Energy acquisition, Macquarie proposes a strategic sell-down to a commercial partner for Patterson Lake South to manage risk in the short term, which the broker considers prudent.
The analyst forecasts capex of -CA$1bn with a 2031 commencement date, compared to Fission Energy’s estimate of -CA$1.1bn and a 2029 start date.
EPS forecasts have been reduced by -24% for FY25 and -7% for FY26. No change to the Hold-equivalent rating and $9.10 target price.
Boss Energy‘s ((BOE)) “solid” 2Q operational result, according to Bell Potter, places the company in good stead for a re-rating of the valuation as shorters are expected to reverse positions in the stock.
The broker believes management is well-placed to beat FY25 production guidance of 850klbs as both drummed production and production in circuit are now operating at nameplate capacity.
Target rises to $4.90 from $4.70. Buy rated.
Citi and Macquarie were also positive about the operational update.
Citi notes Boss achieved sales of 200,000lbs at a US$77.5/lb price, which is viewed as strong by the analyst at 99% realisation versus the U3O8 spot price.
Management retained FY25 production guidance, with 2H25 cost guidance meeting 2021 costs adjusted for inflation.
Macquarie highlighted the update on Honeymoon costs was better than it feared. The broker expected a more dramatic increase in cash costs for FY25-26, so a US$37-41/lb estimate for 2H25 and a path to US$29-32/lb life of mine (LOM) came as a pleasant surprise.
The broker has now cut its estimate to US$23/lb LOM from US$27/lb.
Boss Energy remains a top uranium pick for Macquarie with an increased target price of $4.80, up from $4.50, and Buy-equivalent rating. Citi is also Buy rated with its target price lifted to $3.60 from $3.40.
UBS retains a Buy rating and $3.40 target. This broker maintains a “conservative” view on the near-term recovery for the price of uranium, with growing supply exceeding growing demand over 2025.
Morgan Stanley observes Boss Energy reported better-than-anticipated sales in the December quarter, exceeding consensus expectations.
The company’s drummed production was below estimates, and the analyst attributes the discrepancy to delays in commissioning the horizontal kiln, which has been in operation since mid-January.
Management’s 2H25 cost guidance came in below the broker’s estimate due to previously higher assumed labour cost inflation, the analyst explains. Target price $2.70. Hold-equivalent rated.
Shaw and Partners observes the December quarter activities report for Bannerman Energy ((BMN)) shows ongoing progress in developing the company’s Etango uranium project.
Management continues to wait for an appropriate incentive U3O8 price to commit to off-take agreements and the final investment decision for the project.
The company has cash of $81.1m, and the broker believes it is well-funded to retain a wait-and-see approach to the uranium market.
Shaw and Partners retains a Buy, High-Risk rating with a $7.40 target price.
Macquarie observes the extent of activity regarding the restart of Lotus Resources’ ((LOT)) Kayelekera mine, with over 200 people and mobile equipment on site.
Management aims for initial uranium production in 3Q25. The company has cash on hand of $133m, which was somewhat below the broker’s expectation.
The broker notes around 25% of the first four years of production has been contracted to Curzon and PSEG on fixed-price terms. The majority of the balance of contracts is expected to be market-based.
Target slips -5% to 38c due to a lower AUD impacting the Kayelekera valuation against a lower Letlhakane valuation. Buy-equivalent rating unchanged.
Short positions continue to increase
Up to January 28, Boss Energy was the most shorted stock on the ASX at 20.16% of the company’s capital versus 19.05% the week prior.
Paladin was the second most shorted at 15.43% against 15.06% the week prior, and Deep Yellow in eighth position at 11.50% versus 10.01%.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| 1AE | 31/01/2025 | 0.0500 |  -16.67% |
$0.19 | $0.03 | |||
| AEE | 31/01/2025 | 0.1300 | – 6.90% |
$0.29 | $0.11 | |||
| AGE | 31/01/2025 | 0.0300 | -10.53% |
$0.08 | $0.03 | $0.100 |  233.3% |
|
| AKN | 31/01/2025 | 0.0100 | 0.00% | $0.04 | $0.01 | |||
| ASN | 31/01/2025 | 0.0600 | – 3.17% |
$0.17 | $0.05 | |||
| BKY | 31/01/2025 | 0.3900 | 17.65% |
$0.45 | $0.27 | |||
| BMN | 31/01/2025 | 2.8900 | – 5.97% |
$4.87 | $1.90 | $7.400 | 156.1% |
|
| BOE | 31/01/2025 | 3.3700 | 4.42% |
$6.09 | $2.21 | 26.6 | $3.933 | 16.7% |
| BSN | 31/01/2025 | 0.0200 | – 5.56% |
$0.20 | $0.02 | |||
| C29 | 31/01/2025 | 0.0400 | 0.00% | $0.13 | $0.03 | |||
| CXO | 31/01/2025 | 0.0900 | – 3.26% |
$0.26 | $0.08 | $0.090 | ||
| CXU | 31/01/2025 | 0.0100 | 0.00% | $0.06 | $0.01 | |||
| DEV | 31/01/2025 | 0.0800 | – 7.61% |
$0.45 | $0.08 | |||
| DYL | 31/01/2025 | 1.3300 | – 6.87% |
$1.83 | $0.91 | -327.5 | $1.850 | 39.1% |
| EL8 | 31/01/2025 | 0.2800 | 0.00% | $0.68 | $0.23 | |||
| ERA | 31/01/2025 | 0.0030 | 0.00% | $0.06 | $0.00 | |||
| GLA | 31/01/2025 | 0.0100 | 0.00% | $0.03 | $0.01 | |||
| GTR | 31/01/2025 | 0.0030 | 0.00% | $0.01 | $0.00 | |||
| GUE | 31/01/2025 | 0.0800 | 0.00% | $0.15 | $0.05 | |||
| HAR | 31/01/2025 | 0.0400 | 0.00% | $0.24 | $0.03 | |||
| I88 | 31/01/2025 | 0.6800 | 0.00% | $1.03 | $0.14 | |||
| KOB | 31/01/2025 | 0.0700 | 0.00% | $0.18 | $0.07 | |||
| LAM | 31/01/2025 | 0.7800 | 2.63% |
$1.04 | $0.48 | |||
| LOT | 31/01/2025 | 0.2300 | – 3.92% |
$0.49 | $0.17 | $0.533 | 131.9% |
|
| MEU | 31/01/2025 | 0.0600 | 3.28% |
$0.06 | $0.04 | |||
| NXG | 31/01/2025 | 10.8100 | – 5.88% |
$13.66 | $7.89 | $16.600 | 53.6% |
|
| ORP | 31/01/2025 | 0.0400 | 0.00% | $0.12 | $0.03 | |||
| PDN | 31/01/2025 | 8.6300 | – 0.89% |
$17.98 | $6.83 | 63.2 | $11.558 | 33.9% |
| PEN | 31/01/2025 | 1.0700 | -29.08% |
$2.90 | $1.02 | $4.810 | 349.5% |
|
| SLX | 31/01/2025 | 5.9100 | – 5.20% |
$6.74 | $3.35 | $7.200 | 21.8% |
|
| TOE | 31/01/2025 | 0.2000 | – 6.82% |
$0.52 | $0.19 | |||
| WCN | 31/01/2025 | 0.0200 | 0.00% | $0.03 | $0.01 |
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