Uranium Week: Rising Interest From Utilities

Influence of near-term volatility of financial markets continues

Parallel features continue to characterise U308 markets. As noted by industry consultants TradeTech, the spot price market is being swept up in the volatility of financial markets generally, as expectations around a resolution to the Middle East war wax and wane.

Longer term, the bullish narrative around uranium and nuclear power generation, in contrast, continues to advance. As observed by Canaccord Genuity, energy shocks tend to have positive tailwinds for the uranium sector (backed up by history).

The thematic was discussed in last week’s Uranium Weekly (https://fnarena.com/index.php/2026/04/21/uranium-week-sprott-joins-risk-on-rally/) and re-inforced by the latest announcement from the US Administration’s “Nuclear Dominance – 3 by 33” campaign.

The US Department of Energy’s Office of Nuclear Energy announced a Nuclear Fuel Cycle Consortium composed of more than 90 companies, with the aim of working with the government to ensure the US continues to have enough nuclear fuel to power the existing reactor fleet as well as future advanced reactors.

The three aims by 2033 are:

• Catalyse a secure and cost-competitive domestic fuel supply chain
• Accelerate advanced reactor deployment and close the fuel cycle
• Explore how the consortium can help grow and align workforce, finance, innovation and collaboration of nuclear build-out

The key takeaway for Canaccord is the “genuine, government-backed push” for small nuclear reactor (SMR) deployment.

Utilities seeking out supply 

TradeTech details how the US consortium aligns with robust long term demand by utilities, as evidenced in the term U308 markets, with purchases for delivery starting as early as 2027 and as some buyers are looking out beyond 2035.

Notably, one US utility is observed as waiting for offers for up to 7.2mlbs U308 for delivery between 2027 and 2035, with offers due by May 11.

Canaccord equally highlights the US utility’s intend, which is viewed positively and follows what the analyst states as a “rapid start to the year” from Eastern areas seeking out supply, such as India (Kazatomprom/Cameco), and China with the Bannerman Energy ((BMN)), Etango deal, for first deliveries in 2027.

The example of that US utility may reflect the rising importance to secure supply for western utilities.

Other utilities are also scoping out initial discussions with potential sellers about future fuel needs.

TradeTech explains the changing dynamics around demand and supply. As countries globally announce new nuclear power plant builds, utilities are increasingly aware the drawdown in the inventory overhang is emphasising new supply is required to come on stream.

In turn, this is translating into rising long-term offer prices and higher prices in recent transactions.

Over the last week, ten transactions for 850klbs were conducted in the U308 spot market, with the TradeTech spot price ending down -US$0.75/lb to US$86.25.

Depending on the delivery location, timing and day, the spot price moved between US$86.50/lb and US$87/lb.

Deliveries to ConverDyn’s conversion plant in the US were conducted at higher prices versus delivery at Cameco’s Canadian facility, which has been the case for several weeks.

The TradeTech U308 Mid-term price indicator stood at US$88/lb and the Long-term price indicator at US$93/lb.

Canaccord details how Sprott Physical Uranium Trust (SPUT) has raised cash over the last week and has cash on hand of US$150m, which equates to some 2mlbs of U308.

Over April, the trust has acquired 1mlb and boosted the U308 spot price by US$3.50/lb.

A mixed reception for Paladin’s quarterly update

In corporate news, Paladin Energy ((PDN)) released its 3Q26 trading update, which met Macquarie’s expectations, with production of 1.29mlb, which was pre-reported.

Higher recovery rates, at 92% versus 91% a year earlier, boosted growth in production by 5% from 1Q26, despite lower feed grades at 503ppm against 524ppm in 3Q25.

Management noted the “ramp-up remains on track for completion by the end of 2026”. Macquarie expects this will assist the FY27 guidance.

The analyst believes consensus estimates need to be lowered, with current FY27 consensus at 5.63mlb versus its own estimate at 5.03mlbs.

Macquarie lowers its price target to $13.25 from $13.55, with FY26-FY27 EPS forecasts tweaked down on a slight uplift in operating costs.

Even with the recent pullback in Paladin shares by circa -11%, the stock implies a US$94/lb U308 price, which is closer to the broker’s long-term price assumption. Neutral rated.

RBC Capital observed the momentum at Langer Heinrich remained robust but also pointed to rising costs, specifically from diesel, which represents some 10% of the uranium producer’s cost base.

Namibia is also facing a potential 20% diesel price rise which results in forecast unit costs in 4Q26 to come in above US$50/lb. Diesel cost headwinds are anticipated to transcend into FY27.

The RBC analyst estimates every US$1/lb cost increase amounts to a downgrade in forecast FY27 earnings (EBITDA) by -3% and net profit after tax by -4.1%.

The stock is rated Sector Perform with an $11 target.

UBS remains upbeat on the medium/longer term outlook for Paladin and uranium against a macro backdrop where the world is increasingly focused on energy security and diversification of energy sources.

This analyst views management’s June quarter guidance of around 1.2mlbs, down circa -7% q/q, even at the upper end, as “conservative”, but notes Paladin pointed to grade trending lower as it moved to the back end of G pit.

Sales reached 3mlbs year to date, with guidance unchanged at 3.8mlb-4.2mlb. Management suggested it is witnessing performance towards the upper end of the range.

Regarding the Middle East war, the producer remains cautious regarding disruptions. The broker notes Paladin has between three to ten months supply of key reagents but would not outline any thoughts if the war were to be prolonged.

UBS believes Paladin is in a better position than most of its peers as it is less exposed to sulphur supply challenges. $12.60 target and Neutral rating retained.

On the point of supply challenges, Canaccord highlights 50% of the global seaborne sulphur trade runs via the Strait of Hormuz.

When assessed against the Russian sulphur export bans and the shift of priority to fertiliser production, this analyst stresses levels of concern are likely to escalate.

Some 70%-75% of global uranium supply is extracted using acid leach, with several producers already flagging possible disruptions, including CGN Mining, with production coming in -29% below target due to a “shortage of sulphuric acid” in the 1Q2026 report.

Supply is noted for having returned to normal.

Ord Minnett views the Paladin growth story as post-2030, including the development of Patterson Lake South with a possible start-up in FY32.

In the short term, the analyst retains a cautious take, viewing the outlook as “unclear”, including the full scale mining of the new pit at Langer Heinrich may be more challenging, while the higher cost guidance infers cost impacts from higher diesel prices and reagent prices.

Ord Minnett’s target remains $9.75 alongside a Sell rating.

In contrast, Morgan Stanley retains an upbeat view with an Overweight rating and a slightly lower target of $13.65 from $13.70.

Citi has a Buy rating and an upgraded target price of $15 from $12.80, citing improving operational confidence and continued progress towards a final investment decision at the PLS project.

Bell Potter is Buy rated with a $15.30 target. This analyst highlights management has around 53% exposure to the U308 spot price out to 2030.

Canaccord Genuity stands out with a $16 target and Buy rating, expecting realised prices to trend higher towards the mid-US$70/lb for the balance of 2026.

Latest short positions, according to ASIC data

Boss Energy ((BOE)) sits in the eighth most shorted position on the ASX at 11.44%, up 0.29% over the week.

Lotus Resources ((LOT)) is in tenth position at 11.18%, up 0.54%, and Paladin at fifteenth position at 9.15%, up 0.02%.