Structural uranium supply‑demand deficit, mining developments, price cycles, and market drivers

As 2028 progresses, the global uranium market remains firmly entrenched in a deep and persistent structural supply-demand deficit that continues to shape price dynamics, contracting behavior, and strategic stockpiling worldwide. This deficit is driven by an unprecedented surge in demand—most notably from utilities, the rapidly expanding AI data center sector, advanced nuclear reactor deployments including Small Modular Reactors (SMRs), and defense microreactors—while supply growth struggles against rising costs, limited mining capacity, and critical front-end fuel cycle bottlenecks.

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Deep Structural Deficit Sustains Elevated Uranium Prices and Robust Contracting

The uranium spot price has consistently held above $130 per pound U₃O₈ in early 2028, reflecting intense competition among buyers amid constrained supply. This tight market underpins aggressive contracting, with utilities and new large-scale off-takers locking in volumes to secure long-term fuel availability.

• Utilities such as Constellation Energy continue to expand their contracting portfolios, emphasizing nuclear power’s irreplaceable role in providing clean, reliable baseload electricity.

• The AI data center sector has emerged as a major new driver of uranium demand. The Electric Power Research Institute (EPRI) projects that by 2030, data centers could consume up to 17% of U.S. electricity, underscoring the critical importance of stable, carbon-free power sources. Reflecting this, hyperscale operators like Microsoft, Google, and notably Amazon have announced significant nuclear energy commitments to underpin their AI infrastructure growth. Amazon’s recent announcement to expand its nuclear power footprint highlights the sector’s rising influence on uranium demand.

• Strategic stockpiling programs are intensifying globally, driven by geopolitical tensions and front-end supply chain risks. Governments and private corporations alike are building inventories to hedge against disruptions and geopolitical uncertainties.

• Investor sentiment remains bullish, with Cameco’s 2027 Raymond James Institutional Investors Conference presentation symbolizing renewed institutional confidence and a “nuclear awakening” in capital markets.

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Incremental Mining Growth Amid Rising Costs and Capacity Limits

On the supply side, mining output has improved modestly but remains insufficient to close the widening gap:

• The approval and near-commissioning of Canada’s first new uranium mine in two decades marks a critical milestone, injecting politically stable, high-quality supply into the market and reinforcing the sector’s long-term fundamentals.

• Australia’s Boss Energy Honeymoon mine continues to break records, recently reporting over 450,000 pounds of U₃O₈ produced in a single quarter, supported by federal incentives and favorable market conditions.

• Exploration at Gamma Resources’ Mesa Arc Uranium Project in New Mexico has accelerated, buoyed by increased capital inflows reflecting investor appetite for early-stage supply diversification within the U.S.

• Industry consolidation efforts, such as the Eagle Energy Metals Corp merger, aim to scale production and improve cost efficiency; however, rising capital and operational costs at flagship projects like NexGen’s Rook I temper supply growth prospects and potential price relief.

• Despite targeted U.S. federal grants—including a $2.7 billion program to rebuild domestic nuclear fuel supply chains—U.S. uranium mining output growth remains moderate relative to surging demand.

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Front-End Fuel Cycle Bottlenecks Remain Critical Constraints

The greatest near-term supply challenges persist in the front-end nuclear fuel cycle, particularly in HALEU enrichment and advanced fuel fabrication:

• High-Assay Low-Enriched Uranium (HALEU) enrichment capacity remains highly constrained, with industry experts underscoring the urgency of doubling U.S. enrichment capabilities by the end of 2028 to satisfy demand from SMRs, advanced reactors, and defense microreactors.

• Key projects, including Centrus Energy’s Project Vault and Orano USA’s enrichment plant, are advancing steadily through regulatory and construction phases. Successful and timely commissioning of these facilities is imperative to reduce Western dependence on Russian enrichment services and bolster fuel supply chain resilience.

• On the fuel fabrication front, the Nuclear Regulatory Commission’s (NRC) recent granting of the Special Nuclear Material License to TRISO-X marks a pivotal regulatory breakthrough. This license enables the scale-up of TRISO fuel fabrication, critical for SMR commercialization and next-generation reactor deployment.

• The HALEU fabrication consortium—comprising ASP Isotopes, Quantum Leap Energy, and South Africa’s NECSA—has accelerated pilot production toward near-commercial scale, supported by federal grants. Despite progress, HALEU fabrication capacity remains a bottleneck.

• Technological innovation remains a beacon of hope: Oak Ridge National Laboratory (ORNL) has entered into an agreement with Austra to develop “flowing” nuclear fuel technology, promising improved uranium utilization efficiency and reduced fuel consumption intensity in the medium term. Additionally, Argonne National Laboratory’s advancement in high-temperature nuclear materials testing at 1,340°F (730°C) supports next-generation reactor and fuel performance improvements, particularly for very-high-temperature reactors (VHTRs).

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Geopolitical Realignments and Strategic Procurement Reshape Supply Security

Geopolitical concerns and supply chain security considerations continue to drive major procurement and partnership shifts:

• The $900 million U.S.–France uranium enrichment partnership, involving Centrus and Orano, is progressing on schedule, with centrifuge cascades expected to become operational by late 2028. This collaboration strategically diversifies enrichment supply away from Russian dominance.

• Kazatomprom’s landmark uranium supply agreement with India—the largest in its history and pending shareholder approval—reflects India’s nuclear fleet expansion ambitions and further tightens global uranium availability.

• The resumption of cautious U.S.–U.K. nuclear technology cooperation focuses on innovation, supply chain security, and advanced reactor deployment amid intensifying strategic competition.

• Russia’s extension of Rosatom’s Unit 6 operating license maintains its influence on nuclear fuel markets, compelling Western nations to accelerate alternative supply development and deepen strategic stockpiling.

• The U.S. Department of Energy (DOE) continues heavy investments in nuclear infrastructure, including the planned deployment of a 300 MW floating nuclear power plant by 2028 and expanded defense microreactor programs, underscoring uranium’s strategic importance.

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Watchpoints Shaping the Next Uranium Price Cycle Phase

Several key projects and market dynamics will critically influence uranium market evolution and price trajectories:

• The timely commissioning and ramp-up of Centrus Energy’s Project Vault and Orano’s enrichment plant are essential to alleviate HALEU enrichment bottlenecks and meet surging demand.

• Successful scale-up of TRISO fuel fabrication, enabled by the NRC’s TRISO-X license, will directly impact SMR commercialization and advanced reactor deployments, reinforcing uranium demand.

• Continued exploration and production growth from projects like Gamma Resources’ Mesa Arc Uranium Project and sustained high output from Boss Energy’s Honeymoon mine will influence supply responsiveness.

• Rising production costs at projects such as NexGen’s Rook I may constrain supply elasticity, emphasizing the importance of disciplined capital management.

• Geopolitical developments—including U.S.–France enrichment cooperation and Kazatomprom’s strategic contracts with India—will continue to shape global supply security and market tightness.

• Investor activity remains robust, with physical uranium accumulation by trusts like Sprott Physical Uranium Trust (SPUT) and Yellow Cake PLC driving price momentum and liquidity through aggressive spot market purchases and capital raises.

• The data center sector’s electricity consumption trajectory—projected by EPRI to reach up to 17% of U.S. electricity by 2030—will remain a closely monitored demand variable, with recent moderation signals warranting attention.

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Conclusion: A Strategic Imperative for Coordinated Fuel Cycle Expansion

The uranium market in 2028 remains dominated by a deep structural supply-demand deficit that sustains elevated prices, robust contracting activity, and strategic stockpiling globally. While mining expansions—including Canada’s first new uranium mine in two decades and record production at Honeymoon—provide incremental supply relief, persistent front-end fuel cycle bottlenecks in HALEU enrichment and TRISO fuel fabrication continue to constrain growth.

Geopolitical realignments, such as the U.S.–France enrichment partnership and Kazatomprom’s historic supply deal with India, are reshaping uranium procurement and supply security frameworks, prompting diversified sourcing and intensified inventory building. The AI data center sector has emerged as a powerful new uranium demand driver, adding complexity and urgency to supply challenges.

Capital inflows, industry consolidation, and technological innovation in advanced fuels and reactor technologies add momentum to the sector. However, the strategic imperative is unmistakable: urgent, coordinated expansion and innovation across the entire uranium fuel cycle—from mining through enrichment, fabrication, to reactor commissioning—are essential to secure uranium’s pivotal role in powering a low-carbon, secure, and AI-driven global economy beyond 2028.

Failure to act decisively risks precipitating a nuclear fuel crisis capable of stalling critical SMR and advanced reactor deployments, jeopardizing the U.S. nuclear renaissance and constraining global nuclear energy ambitions at a pivotal moment in the energy transition.