Stocks of uranium companies are falling despite the strongest long-term fuel prices in more than 18 years, as investors weigh an expected tightening of supply against rising costs and the difficulty of bringing new projects into production. The VettaFi Global Uranium Mining Index, a benchmark tracking uranium mining shares worldwide, dropped 16% in September and the Nasdaq Sprott Junior Uranium Miners Index lost 22%, while spot uranium prices barely moved. Financial-market pressures appear to be overwhelming an improving fuel-market outlook, Sprott market strategist Paul Wong wrote in an Oct. 28 analysis. “Even if the expected uranium price is unchanged, tighter liquidity can raise the cost of capital, compress valuation multiples and delay the market’s recognition of future project value,” Wong wrote. “Those effects are real, but they are cyclical and financial.” The divergence matters because stronger fuel prices alone cannot deliver new production: developers still need permits, financing and years of construction. Sprott manages the world’s largest physical uranium fund, Sprott Physical Uranium Trust (TSX: U.UN; U.U), which held $7.6 billion in net assets as of Thursday. Spot prices Spot uranium prices are forecast to average $95 per lb. next year, up from an expected $88 this year, analysts at Fitch Solutions’ BMI wrote in an Oct. 15 outlook. Potential constraints on Kazakhstan’s production and increased utility purchasing underpin that forecast. However, the near-term market is better supplied than the longer-term outlook might suggest. Global mine output is forecast to rise 7.8% this year, leaving a modest surplus when secondary supplies and demand from stockpiling and financial buying are included, BMI said. BMI expects the market to shift into deficit next year. Its forecast suggests that expectations of future scarcity, rather than an immediate shortage, are supporting higher long-term prices. Contracting strengthens TradeTech’s long-term uranium price indicator held at $97 per lb. from June through September, up $13 from a year earlier and at its highest level in more than 18 years, the Colorado-based uranium pricing and nuclear fuel consultancy said in an Oct. 2 statement. Utilities were seeking deliveries beginning as early as 2027 and extending into the late 2030s, TradeTech president Treva Klingbiel said. An increase in natural uranium purchasing is likely in 2027–28 after utilities focused on securing enrichment and conversion services during the current contracting cycle, BMI said. Longer term, reactor uranium requirements are forecast to grow by an average 4.1% annually over 2026–35, ahead of mine production growth of 3.3%, BMI forecasts. China’s reactor construction is the main demand driver. Some proposed Western projects are unlikely to proceed because of financing and regulatory barriers, BMI cautioned. Kazakhstan presents a nearer-term supply risk. Commissioning of Kazatomprom’s (LSE: KAP) sulphuric acid plant has been delayed until between the third quarter of 2027 and the first quarter of 2028 after palaeontological specimens were discovered at the construction site, BMI said. The acid is essential to the country’s dominant method of uranium extraction. Kazatomprom has said it does not expect the plant delay to materially affect mining operations, BMI noted. Nevertheless, the consultancy forecasts lower Kazakh output next year, reflecting its assessment of acid availability and the producer’s preference for value over volume. Operational challenges and a shortage of immediate catalysts have also weighed on uranium shares, Argonaut deputy research head Jon Scholtz wrote in an Oct. 12 update. Contracting remains below replacement levels even as the longer-term supply outlook tightens, he wrote. Company setbacks Cameco (TSX: CCO; NYSE: CCJ) illustrates the operating pressures. The company reported third-quarter adjusted earnings before interest, taxes, depreciation and amortization of C$267 million ($191 million), 44% below BMO Capital Markets’ forecast, mining analyst Alexander Pearce wrote on Friday. Lower uranium sales and higher unit costs drove much of the shortfall. Attributable production of 3.5 million lb. missed BMO’s forecast by 19%, while sales of 5.6 million lb. were 18% below expectations. The realized uranium price of $65.80 per lb. met expectations, Pearce wrote. Cameco narrowed its annual production forecast to 19.5 million–20.5 million lb., from 19.5 million–21.5 million, and raised uranium cost-of-sales guidance to C$67–70 per lb., from C$63–67.50, in its results on Friday. The Key Lake maintenance shutdown extended into the fourth quarter, leaving a risk to production if the restart is delayed, Desjardins mining analyst Bryce Adams wrote on Friday. Increased engagement with customers reassessing fuel availability and supply security could support near-term contracting, Adams wrote. He maintained his buy recommendation and C$190 target. Cameco shares eased 0.5% to C$116.63 in Toronto on Thursday, ahead of Friday’s results, valuing the company at about C$50.8 billion. The stock has traded between C$107.55 and C$182.72 over the past year. Years to production At NexGen Energy’s (TSX: NXE; NYSE: NXE) Rook I project in Saskatchewan, construction began in June, with first ore targeted for the third quarter of 2030, according to its October presentation. Early work appeared consistent with management’s assessment that construction was on schedule and budget, Red Cloud Securities research head David Talbot wrote after an Oct. 22 site visit. Ground freezing in early 2027 and shaft sinking into basement rock in 2028 remain important tests. Talbot expected prepayments or project debt, or a combination of the two, to cover about C$1.2 billion of remaining funding needs in late 2026 or early 2027. NexGen shares fell 3.6% to C$12.06 in Toronto on Thursday, leaving them about 36% below their 52-week high of C$18.91. Existing infrastructure also takes time to return to service. Anfield Energy (TSXV: AEC; NASDAQ: AEC) received draft licensing and groundwater permitting documents for its Shootaring Canyon mill in Utah on Oct. 21, the company said in an update on Tuesday. Anfield targets licence renewal in the second quarter of 2027. That timetable, followed by about a year of construction, points towards production around mid-2028, Talbot wrote on Oct. 28. Financing for about $117 million of initial capital also remains necessary, he wrote. Anfield shares weakened 1.4% to C$4.37 on the TSX Venture Exchange on Thursday. Calmer financial markets, additional utility contracts and progress on production, permits and financing could help reconnect uranium shares with fuel-market conditions, Wong argued. “The current divergence can persist longer than fundamental investors expect,” he wrote. “Liquidity regimes turn on the market’s timetable.”
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