Nuclear power utilities resumed uranium purchases in late 2025 after a year of minimal contracting activity, signaling potential price increases as global supply remains constrained below reactor demand.
Utilities contracted approximately 82 million pounds of uranium in 2025, falling well short of the 150 million-pound annual replacement rate the industry considers necessary, according to Sprott Asset Management. The gap reflects months of delayed purchasing as utilities navigated policy uncertainty around trade restrictions and tariffs.
The contracting pattern shifted notably in the fourth quarter. After utilities placed only 48 million pounds under contract through October, November alone added 27 million pounds across 14 new deals. Long-term contract prices climbed to $86 per pound by late 2025, up from $80 at the start of the year.
“4Q25 appears to have marked a shift in utility contracting activity, finally allowing the term price to rise,” Sprott analysts wrote in a December market report.
Investment banks have taken notice of the market shift. Morgan Stanley analysts identified uranium as one of their preferred commodities for 2026, projecting prices could reach $90 per pound by the third quarter as utilities short on inventory enter spot markets, according to a research note circulated in January.
Nuclear utilities face growing procurement pressure as uncontracted requirements mount. Industry estimates show utilities left 25 to 30% of their 2025 uranium needs uncontracted, escalating to 35 to 40% for 2026 and nearly 70% by 2027 and 2028. This forces power generators into spot markets or long-term contracts at substantially higher prices.
Annual reactor demand stands at approximately 185 million pounds while primary uranium production hovers around 130 million pounds, creating a persistent 28% supply shortfall. Major producers, including Kazakhstan’s Kazatomprom, have signaled reduced 2026 production levels, tightening available supply further.
The contracting delays stemmed primarily from policy uncertainty throughout 2025, including potential tariffs on uranium imports and trade restrictions affecting the nuclear fuel cycle. Uranium fuel represents only 5-7% of total nuclear generation costs, allowing utilities to absorb higher prices while securing long-term supply certainty.
Financial investors, including Sprott Physical Uranium Trust and Yellow Cake, have removed over 100 million pounds from markets since 2021 by building physical uranium holdings, further constraining available supply for utility buyers.
Cameco, one of the world’s largest uranium producers, reported that approximately 119 million pounds of uranium were placed under long-term contracts by utilities in 2024. While below replacement rates, the activity reflected growing utility concern about future supply availability as secondary stockpiles diminish.
Industry analysts widely expect the supply deficit to persist through 2026 as reactor requirements continue exceeding primary production capacity. Utilities typically maintain three to five years of forward coverage through long-term contracts, making current procurement gaps historically unusual.
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