Summary
In this interview with Natural Resource Stocks, Justin Huhn, founder of Uranium Insider, explains why the 96.50 blended term price keeps rising while the spot market stays quiet, and why he views the supply response as not price suppressive. He also covers Kazatomprom's two large contracts announced in August, hyperscaler-driven de-risking of the U.S. reactor fleet, and his view that uranium equities are near a sentiment low within a 15 to 20 year secular bull market.
Transcript
Key Takeaways:
- Quiet Spot Market: Huhn reports the spot price has pulled back about $1.50 over roughly six weeks on thin volume, with no motivated selling from traders holding monthly production offtakes. He reads the absence of the usual month-end price push-down as sellers positioning for higher prices.
- Kazatomprom Contracts: Kazatomprom announced in August two contracts large enough to require a special shareholder vote, one with China and one with Russia. Huhn says this appears to be the first time state-owned Uranium One has bought uranium under a long-term contract from its JV partner in direct competition with nuclear utilities, and calls it a development the market has overlooked.
- Supply Not Suppressing Price: Huhn estimates primary supply rose from roughly 115 million pounds in 2020 to about 175 million pounds this year, while the price doubled. He argues new supply from developers such as NexGen and Denison, which he says are selling through market-referenced contracts with very high ceilings, has not pushed prices down.
- Hyperscalers and the U.S. Fleet: Huhn says hyperscaler power purchase agreements are extending reactor lives and funding restarts, including Palisades, Duane Arnold, the Crane Clean Energy Center (Three Mile Island), and V.C. Summer. He expects every U.S. reactor except possibly Diablo Canyon to operate to 60 years, with half already applying for extensions to 80 years.
- New Build and NRC: He cites the NRC's early site permit approval for the GE Vernova BWRX-300 at TVA's Clinch River site and a potential U.S.–South Korea collaboration on eight large reactors, six AP1000s and two APR1400s. He predicts dozens of SMRs in various stages of construction in the U.S. within five years, which he describes as his opinion.
- Price Outlook: Huhn considers $130 uranium by the end of 2027 not a stretch, and expects spot to breach $110 per pound the next time it runs. He describes the current period as a secular bull market lasting 15 to 20 years, barring an exogenous event.
- Equity Sentiment: He attributes the equity pullback to cooling AI sentiment and macro concerns including bond yields and the midterm elections, and says public capitulation on social media has historically signaled lows. He says smaller-cap equities can move 100% to 200% on a 30% move in spot.
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