Justin Huhn: The Uranium Market Is Setting Up for a Major Move

Key Takeaways:

• Term and Spot Pricing: Huhn notes the long-term price has risen from $80 to $95.50 per pound over the past year, flat in the most recent month, while spot has moved up roughly $3 over the last month at 10 to 20 cents a day. He emphasizes this spot move is occurring with no participation from financial interests — SPUT was at a 7 to 8% discount to NAV and Yellow Cake in the mid-teens at the time of recording — with would-be sellers simply holding material more tightly.
• Early-2030s Supply Gap: Huhn estimates the market is roughly 20 million pounds short this year, drawing down commercial rather than utility inventories, but argues the more consequential shortfall sits in the 2032–2035 window. Citing Scott Melby, he contends the incumbent producers — Cameco, Orano, Uranium One, Kazatomprom, BHP and traders with offtakes — will run out of pounds they can sell into that period because the projects needed to supply it have not started construction, forcing utilities into the spot market and smaller carry trades.
• Near-Term Capacity Growth: Rather than relying on the World Nuclear Association's 2040 projections, Huhn frames his models around what is already being built: roughly 80 reactors under construction globally, 39 of them in China, all of which he expects to be grid-connected within five years. On that basis alone he projects 25% growth in nuclear capacity over the next five to six years, coinciding with the period utilities are contracting to cover.
• US Buildout Mechanics: Huhn points to three small modular reactor designs reaching first criticality within twelve months under the pilot program, and to the executive order targeting ten large reactors under construction by 2030 — likely Westinghouse AP1000s at five sites, potentially alongside GE Hitachi's BWRX-300. He describes a structure under discussion in which hyperscaler power purchase agreements escalate in price if projects run over schedule or budget, substituting for the cost-overrun protection utilities want and government does not want to provide. He notes his models assume no new US capacity beyond TerraPower's Natrium reactor at Kemmerer, Wyoming.
• Fuel Cycle Pinch Point: Huhn argues the conversion bottleneck is overstated, citing Solstice's reported internal discussions about building additional capacity beyond the Metropolis plant if utility contracting supports it, and pointing to expansion at Urenco and in France, the UK and China. He relays that two separate UXC representatives have stated uranium, not conversion or enrichment, is the biggest pinch point across the fuel cycle for the remainder of the decade — with the US ban on Russian imports still taking effect January 1, 2028, and Global Laser Enrichment targeting commercial production in the early 2030s at roughly 5 million pounds of UF6 equivalent from re-enriched tails.
• Uranium Royalty's Sweetwater Deal: Huhn characterizes the acquisition of Sweetwater Royalties — approximately 850,000 acres of fee surface rights and 4.5 million acres of mineral rights, largely in Wyoming — as an intelligent move despite confusing some uranium investors. He values it less for exploration potential, which remains unknown pending review of historical drill data, than for the cash flow it generates to fund further royalty acquisitions and physical uranium trading, and he defers on the associated long-term debt.
• NexGen Construction and BHP Interest: Huhn calls Arrow the best undeveloped uranium asset in the world and notes NexGen Energy has now broken ground, with a Reuters article quoting CEO Leigh Curyer on talks with BHP as the company seeks an additional billion dollars of capital. He reads BHP's staking near the Athabasca Basin as positioning for a longer cycle rather than a reaction to current prices, and argues that if NexGen builds Rook I successfully and retains full ownership — with Patterson Corridor East behind it — the company becomes substantially larger, though he declines to predict whether a takeout, equity stake or offtake results.

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