According to Sprott analysts, the uranium market is heading into the end of 2025 with significant momentum. In a new analysis, the asset manager identifies three developments that could further drive the sector: the US strategy on critical minerals, accelerated demand for nuclear fuel, and ongoing supply concerns. Together, these factors paint a picture in which uranium plays a growing role in future energy supply – with corresponding implications for pricing and capital flows.
Uranium and US Politics: Strategic Stockpiles as a Driver
In the political context, Sprott refers to the US government’s intention to build up uranium stockpiles to reduce the supply gap for domestic utilities and mitigate dependence on imports – particularly from Russia. Such a program, according to their assessment, could direct billions of dollars into establishing a secure uranium supply chain and necessary nuclear technologies. For the market, this would be an additional demand driver, introducing a strategic component alongside the regular procurement cycles of utilities. The background is a structural deficit: the US is one of the largest consumers of nuclear fuel but has only limited domestic mining and enrichment capacities. A government-backed build-up of buffer stockpiles would address this risk – and increase the visibility of uranium demand.
Growing Uranium Demand: WNA Doubles Forecast and New Buyers Emerge
Sprott names the demand side as the second catalyst. At the September symposium of the World Nuclear Association (WNA), the outlook for uranium was significantly revised upwards: Annual demand could rise from the current approximately 175 million pounds U3O8 equivalent to 391 million pounds by 2040 – an increase of 124% and more than double previous WNA forecasts. Notably, a “new class” of potential demanders is emerging: hyperscale technology companies like Microsoft, which, due to their growing electricity needs, are increasingly relying on reliable, low-carbon baseload power, thereby shaping the discussion about nuclear energy-related power purchase agreements and long-term fuel security. For the uranium market, this means: in addition to government and utility-driven programs, additional industry-driven procurement streams could emerge, broadening the traditional demand base.
Supply under Pressure: Production Cuts and Project Risks in Focus
According to Sprott, growing demand is met by a persistently tight supply. Expected production declines from leading suppliers like Kazatomprom and Cameco, as well as operational and financial risks along the global project pipeline, limit short-term elasticity. Sprott also points out that even current market reports (including the WNA analysis) do not fully reflect all recent production cuts. This could mean that supply shortages in the coming quarters will be more severe than headlines suggest. For utilities, this increases the necessity to diversify supply chains and secure future requirements early – an environment that tends to amplify price volatility in uranium.
Market Signals: Price Rebound and Uranium Stock Performance
On the pricing front, Sprott observed a shift in sentiment in September: Fresh capital and tighter supply reportedly drove the uranium price up by approximately 8% during the month – to about $82 per pound. Previously, for months, market friction had occurred, during which price indices diverged by up to $17 per pound – a situation that, according to Sprott’s interpretation, is not sustainable long-term for a market in structural deficit. In parallel, the activity of physical investment vehicles continued: The Sprott Physical Uranium Trust (TSX: U.U in USD; U.UN in CAD) has further expanded its holdings and now holds over 72 million pounds of U3O8 – remaining the largest physical uranium position globally. Since the beginning of the year, the Trust has seen a performance of approximately +8.7%, with its market capitalization exceeding $6 billion.
Uranium stocks also benefited: The Sprott Uranium Miners ETF recorded a gain of over 50% this year. Over a five-year comparison, Sprott states, uranium and corresponding stock indices have significantly outperformed many other asset classes. This dynamic reflects, on the one hand, the solidifying narrative of a nuclear energy renaissance, and on the other, tight physical availabilities and the growing focus of institutional investors on energy security and decarbonization. Nevertheless, the picture remains multi-dimensional: short-term price surges can be overdrawn by supply announcements, political decisions, or futures market movements, while long-term investment cycles in mining, conversion, and enrichment take years to have an effect.
Conclusion: From Sprott’s perspective, a structurally tight uranium market meets political interest, rising industrial demand, and limited supply flexibility. The combination of potential US strategic purchases, significantly higher WNA demand forecasts, and supply restrictions from key producers sets the stage for the current momentum. The question now is: How quickly will political programs and new demanders materialize – and at what pace can the supply side truly catch up?
