Scotiabank (TSX: BNS) projects the uranium market will remain in a structural deficit until 2030, according to a research note published on March 25. The brokerage estimates the shortfall will equal approximately 4.9% of annual demand over the coming years.
This timeline extends their previous forecast by one year, highlighting continued challenges in ramping up new production. The bank’s revised outlook reflects permitting delays for several new mining projects that were expected to come online sooner.
Despite the current weakness in spot prices, Scotiabank’s analysts maintain that “uranium market fundamentals remain positive” after reviewing supply-demand dynamics. The report identifies growing agendas around decarbonization, energy independence, and power security as key drivers for long-term nuclear energy growth.
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Notably, the report highlights China’s leadership role in nuclear expansion, forecasting that global nuclear capacity will increase by 12% by 2030, 30% by 2035, and 50% by 2040.
While planned supply expansion could potentially push the market into modest oversupply beginning in 2031, analysts warn that execution risks remain elevated for new projects.
In response to its updated outlook, Scotiabank has reduced price targets for several uranium producers, including Cameco Corp (NYSE: CCJ), which saw its target drop to C$81 from C$85, though this still represents a 24% upside from current levels. Denison Mines Corp (NYSEAMERICAN: DNN) and NexGen Energy (TSE: NXE) also received price target cuts.
The uranium sector has recently faced headwinds, with major producers experiencing share price declines amid softer spot prices for the nuclear fuel.
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