Summary
In this interview on Palisades Gold Radio, Justin Huhn, founder of Uranium Insider, explains why he considers the uranium bull case as strong as it has ever been, arguing that term contract terms point to higher prices and that the spot price will breach $200 a pound this cycle. He also covers hyperscaler and SMR demand, the Iran war's effect on energy security and sulfuric acid, India's nuclear buildout, and why he sees uranium equities as undervalued.
Transcript
Key Takeaways:
- Term Contract Terms: Huhn says incumbent producers such as Cameco and Kazatomprom are signing market-referenced contracts for late 2020s and early 2030s delivery with floors in the $70s and ceilings of $140 to $150, sometimes $160. He adds that some contracts under negotiation reportedly have floors and no ceilings, though he expects utilities to sign only small volumes on those terms for now.
- Price Outlook: Huhn expects the spot price to go well north of $200 a pound during this cycle, noting that the 2007 peak is above $200 in inflation-adjusted terms. He believes the setup is better than the previous cycle, with spot trading around $90 a pound for the past three to four months on very low volumes.
- Uranium 1 Contract: Huhn points to Kazatomprom's August long-term contract with Uranium 1, which he describes as the first such deal with its biggest joint venture partner. He reads it as a sign that Russia is competing with nuclear utilities for supply and that Russian enrichment capacity is below demand. He estimates global underfeeding has fallen to 5 to 10 million pounds a year, versus 20-plus million pounds six or seven years ago.
- India's Buildout: Huhn cites two large contracts, one with Kazatomprom and one with Cameco, totaling 45 million pounds plus, signed in Q4 of last year and Q1 of this year. He says India has also changed its liability laws for foreign partners and aims to grow from roughly 8 gigawatts to 100 gigawatts by 2040 or 2045.
- Iran War Effects: Huhn says the Strait of Hormuz disruption has intensified focus on sovereign energy security. He also says it has pushed sulfur and sulfuric acid prices sharply higher, with possible small production impacts at a couple of African projects. Russia's sulfuric acid export ban carves out Kazatomprom, so he expects no disruption there.
- SMRs and Hyperscalers: Huhn says his models include no SMR demand until 2031, which he calls highly conservative. He cites OPG's Darlington BWRX300 build, approval for early site permitting for the Tennessee Valley Authority's planned unit, and hyperscaler interest in NexGen Energy. He considers an Amazon or Meta long-term uranium offtake plausible and likely to disrupt the market.
- Equity Valuations: Huhn says uranium miners and nuclear equities are trading near 52-week lows, with some down 50 to 75% from last year's highs. He argues that investors wrongly treat developer supply such as Denison's Phoenix and NexGen's Arrow as bearish, and expects a re-rating once they see that new supply will not suppress prices.
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