Cantor Fitzgerald has issued a critical update on the uranium market following a significant reduction in production guidance by Kazatomprom, the world’s largest uranium producer. The investment bank views this development as a pivotal “market clearing event” that could drive the next phase of the uranium bull market, with substantial implications for uranium prices and equities.
Recently, Kazatomprom announced a 17% reduction in its 2025 uranium production guidance, lowering its expected output to 25.0-26.5 KtU, equivalent to 65.0-68.9 million pounds of U3O8. This adjustment marks the fifth consecutive year of significant guidance reductions from the company, reflecting ongoing operational challenges at some of its key in-situ recovery (ISR) joint ventures, particularly Budenovskoye and Appak.
The Kazakhstan-based company cited an “undersupply of sulfuric acid” and “delays in construction works at newly developed deposits” as primary factors behind the reduced output. The Budenovskoye ISR operation, a joint venture with Russia’s Rosatom, has been especially impacted, with production cuts of 80% in 2024, 68% in 2025, and 38% in 2026. This reduction has exacerbated concerns about the operational stability of the world’s largest uranium producer, particularly as the company also flagged potential further cuts beyond 2025 due to revisions in subsoil use licenses.
Kazatomprom’s challenges are further compounded by a 32% inventory drawdown over the past six months, leaving the company with 4.1 KtU (10.8 million pounds of U3O8) by the end of Q2 2024. The sudden resignation of Chief Financial Officer Sultan Temirbayev on August 19, after less than a year in the role, has added another layer of uncertainty.
“Clear the market”
Cantor Fitzgerald views Kazatomprom’s reduced guidance as a critical event that is fundamentally bullish for uranium prices. The investment bank’s latest uranium macro update suggests that the production cut will “clear the market,” driving renewed activity in both the spot and term markets. This is particularly significant given the recent correction in spot uranium prices, which have fallen from approximately $107 per pound U3O8 in February 2024 to around $80 per pound in recent months.
Mike Kozak, a senior analyst at Cantor Fitzgerald, emphasized that this price correction aligns with the base escalated floor price levels on new long-term contracts, typically spanning four to five years.
“In our view, this is a clear indication that fundamentally, spot uranium prices have likely bottomed,” Kozak noted. With Kazatomprom’s 2025 guidance reduction now fully absorbed by the market, Kozak expects the next sustained directional move for uranium equities to be upward.
Cantor Fitzgerald’s price forecasts for uranium reflect its bullish outlook. The bank projects spot uranium prices will reach $120 per pound in 2024 and $130 per pound in 2025, with term prices expected to follow closely at $110 and $120 per pound, respectively. These price targets are based on Cantor’s assessment that the market has likely bottomed and is poised for a significant upward move.
The agency’s updated supply-demand model now forecasts a cumulative primary supply deficit of 1.29 billion pounds of U3O8 over the 2024-2040 period, a slight increase from the previous estimate of 1.27 billion pounds. This projection underscores the structural undersupply in the uranium market, which is struggling to keep pace with increasing global demand driven by the expansion of nuclear energy programs.
The investment bank’s report highlights that the uranium market has been in a state of primary undersupply for several years, a situation that is unlikely to change in the near term. The demand for uranium is expected to grow steadily as countries continue to pursue nuclear energy as a key component of their low-carbon energy strategies.
“The uranium market remains in a state of structural primary undersupply against increasing and broad-based growing demand,” the report states, emphasizing the critical role that uranium will play in the global energy transition.
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One Response
A main question for me why KAZ claims an undersupply of sulphuric acid. KAZ neighboring country China is the biggest producer and consumer of chemicals. Are there any import restrictions?