Summary
In this interview, Justin Huhn, founder of Uranium Insider, explains why he sees a longer runway for the uranium cycle than he did in prior years, arguing that uranium's scarcity comes from the time and cost required to bring new mines online rather than a lack of resources in the ground. He covers the rising term price beneath a flat spot market, China's reactor build-out and inventory strategy, jurisdiction risk among producers, position sizing across SPUT, ETFs, and juniors, and the scenarios that could weaken his bull case, including a nuclear accident or cuts to hyperscaler capex.
Transcript
Key Takeaways:
- Term Market Momentum: Huhn notes the term price sat within a dollar of $80/lb for 15 months before climbing to a blended $95.50 between UxC and TradeTech over 10 months, while spot held firm near $85. He reports roughly 15 known RFPs during a typically quiet July and says base-escalated contracts for late-decade and early-2030s delivery are already being signed at triple digits.
- Supply Response Lag: Huhn estimates a sustained price of $150+/lb is needed to bring marginal projects into development, and says supply would take at least 3 to 5 years to respond even at $125/lb. He cites NexGen Energy's Arrow as an example where construction difficulty, not price, is the constraint, expecting its stated 48-month build (since referenced as 54 months) to stretch to five or six years.
- China's Build-Out: China has 38 reactors under construction, almost 40 GW, and is connecting roughly 7 to 9 reactors per year. Huhn notes China's goal of 150 GW by 2035 against 63 GW today, and says China will pass France this year as the second-largest nuclear market.
- Strategic Inventories: Huhn estimates China absorbed roughly 50% of the post-Fukushima mobile inventory, likely more than 100M lbs, and argues its reported commercial inventories include strategic and military reserves that are never sold. He calculates a 103 GW fleet will burn about 50M lbs per year plus about 60M lbs in initial core loads, and treats any US military demand or proposed US and EU strategic reserves as right-tail demand absent from his models.
- Jurisdiction Discount: Huhn says Kazatomprom has always traded cheaply relative to Cameco because of Kazakhstan's exposure to Russian influence, while Cameco has become more of a nuclear stock through Westinghouse, Port Hope conversion, and a likely increase in its Global Laser Enrichment stake to 75%. He cites Global Atomic's Dasa project in Niger at a C$289M market capitalization as an example of a heavy jurisdictional discount.
- Revised Cycle Timing: Huhn says he would have placed the cycle in the fourth or fifth inning in 2021 but now puts it closer to the second. He attributes the change to developments not anticipated in 2019, including the Russia-Ukraine war, bipartisan support for nuclear, and AI and data center demand.
- Portfolio Positioning: Huhn views SPUT as the foundational position in a uranium allocation, citing a roughly 10% discount to NAV and what he sees as single-digit downside against a potential doubling if uranium reaches $150/lb in the next two to three years. He considers a diversified basket of juniors, such as five positions at 2% each, a reasonable speculation after their underperformance, while suggesting most investors simply hold SPUT alongside URNM or URNJ.
.avif)
