Uranium’s Next Wave: Decoding the 2025 Market Through a Veteran’s View of Trading Cycles

Having well navigated multiple uranium cycles trading both uranium equities and physical uranium, I often get asked to share my perspective on today’s market opportunity. The sentiment I’m observing reminds me remarkably of previous significant entry points, particularly last summer’s bottom. When I see widespread disappointment across social media and hear the familiar chorus of defeated investors, my interest peaks.

Let’s start with some historical context. The last major bull run began with uranium prices languishing at $11-13 per pound, ultimately reaching $140. Today, as we eye the potential path to $200 (the inflation-adjusted equivalent of 2007’s peak), the journey looks different but equally promising. However, the market continues to make the same fundamental mistakes in understanding this complex sector.

The recent anxiety over Russian sanctions provides a perfect example of market misunderstanding. While headlines focus on potential supply disruptions, the reality is more nuanced. Russian material won’t disappear; it will simply redirect to China and other willing nations. Subsequently, previously thought to be China-bound material from other sources will become available to Western buyers. The real challenge lies not only with the uranium supply itself but in enrichment and conversion capacity.

This bottleneck will actually require more raw uranium as companies struggle to create enough enriched uranium supplies to meet fuel rod manufacturers demands. Read up on the current shift to overfeeding due to enrichment constraints and understand how this creates additional uranium demand beyond what many market participants realize.

Perhaps the market’s greatest misconception involves mine development timelines and costs. During the last cycle, only a small fraction of uranium companies actually succeeded in building or expanding mines. The often-quoted “decade to production” timeline proves consistently optimistic – most successful projects often require two to three bull/bear cycles to enter production, often spanning 20-30 years. This reality check becomes starker when considering that the industry typically needs to invest in 100 or more exploration projects to yield one successful mine (sometimes said to be 10,000 to 1 across the mining sector as a whole).

The cost structure facing the industry continues to escalate. Political instability, as evidenced by the situation in Niger, represents just one of many challenges. Resource nationalism, labor inflation, and increasingly stringent environmental regulations all contribute to rising costs. During the last cycle, average all-in costs ended up more than doubling to exceed $75 per pound, and that figure didn’t account for the true cost of historical work or a fair time value of money invested. Today’s cost environment appears even more challenging.

With this in mind, it’s easy to see why so many people grow to hate the mining sector. Many management teams are self-serving hacks that perpetually dilute investor returns while somehow always finding ways to justify more compensation for themselves. Yes, even the ones producing often make terribly tragic errors in judgment that cost shareholders huge sums by contracting forward sales poorly. All you’ll hear from them though is justification for their poor management as they try to pretend that no one saw the current market dynamics coming. Or that inflation was a surprise. But somehow they are justified in receiving huge compensation despite lacking of vision.

I digress, so let’s continue explaining why times are tough and often get worse. Supply chain complexities further compound production issues. We’re witnessing bottlenecks in enrichment capacity, conversion facilities, and critical supplies like sulfuric acid. Skilled labor scarcity and power supply constraints add additional layers of complexity. These challenges won’t resolve quickly or easily.

But, there is good news. The fact that the industry is terrible, management teams are short-sighted and overly optimistic (aka bullshitters) about their own prospects…it all combines to create bonafide shortages every single time a resource sector goes from bust back to boom.

The current market pullback, particularly in junior uranium equities, presents a compelling opportunity. Australian uranium stocks, in particular, appear notably undervalued. This situation reminds me of last summer’s entry point, which proved highly profitable for those who recognized the opportunity. Once again, I’m seeing that familiar combination of sadness and pessimism across social media – often a reliable contrary indicator in this sector.

For investors approaching this opportunity, I recommend a basket approach focusing on several key criteria. Look for teams with proven execution ability – those who successfully navigated the last cycle and understand the realistic challenges of mine development. Prioritize projects in favorable jurisdictions with strong governmental support. Focus on companies with robust balance sheets capable of weathering the sector’s volatility. Near-term producers with realistic timelines deserve particular attention.

The uranium market appears primed for its next major move. Supply security concerns continue to grow, and institutional interest, while building, hasn’t yet reached mainstream levels. The combination of deflated sentiment, realistic cost pressures, and structural supply constraints suggests we’re at another tactical entry point in what promises to be a prolonged bull market.

The AI power demands on top of the huge transition to electric vehicles are sparking real concerns about major power shortages and leading to the biggest high-tech companies in the world starting to seek entry into the nuclear power arena. Consider what’s about to come down the pipe with solid-state batteries and robots. The electrical power demands are so massive that it’s actually hard to fathom how we will keep up even with our best efforts. Power price inflation is coming and it’s coming big time.

Meanwhile, Rome burns. Extreme weather events due to climate change are real. Excess heat is causing more and more serious wildfires. Excess heat leads to excess evaporation and what goes up must come down. Record rainfalls and floods. Then there’s the serious damage from hurricanes and tornados. It’s a recipe for more environmentalists to wake up and smell the reality. Countries like Germany foolishly shut reactors and have now been forced to burn more coal. Leaves people like me asking, WTF? The decision-making behind this is just so illogical. (shaking my head)

We are destined to see the physical price of uranium creep higher as the market continues to tighten and the smarter participants in the fuel-buying game step up and try to build inventory as they finally read the writing on the wall and also manage to get face time with the utility exec teams that have to approve budgets and earmark capital.

People often ask why this process is so slow? Why do they seem to all delay acting then all of a sudden act at once? Well, it’s a small market and it’s also typically not that important or pressing for many utilities that have multiple sources of power. Uranium makes up such a small cost that it’s not nearly as important as, say… getting screwed over because they didn’t lock in long-term contracts for natural gas or coal. All you have to do is look at the price spikes in the power cost in Europe and the huge input price increases because of coal and gas surges over the last couple years to see where they are focusing their attention and why.

Still, we are set up for the perfect storm. There will be a major supply disruption at some point and it will be off to the races. Anyone who follows mining knows well there’s always problems popping up somewhere. The big difference is that in a bear market supply shocks are easily managed. At the start of a bull market it adds to the trend. Like shutting down mines but not reactors in 2020 due to COVID was the signal I was waiting for to finally flip the balance to positive sentiment. Now that things are really tight, a few months of delay at a major mine due to a strike, politics, geology, equipment failure or a natural disaster will send prices running hard back to the old inflation-adjusted highs.

When that happens, like it always does, there will be a surge of new money flowing in that thinks the sector is a no-brainer. And these people won’t be using their brains. They will pour money in and create a bubble. That’s how this game works.

So, looking ahead, I expect ETF flows to accelerate as the supply shortage becomes more apparent. True production costs will likely continue their upward trajectory, while infrastructure constraints limit any meaningful supply response. The market’s structure today appears even more compelling than during previous cycles, supported by growing recognition of nuclear power’s critical role in the clean energy transition.

A massive supply-demand gap looms in the coming years. The longer it takes for prices to spike and capital to flow into new mine development, the higher the physical price of uranium will ultimately climb. Uranium mines are the most difficult mines to get permitted for obvious reasons. Supply is going to be the bottleneck and huge profits will be had by those who can bring on new production when prices go skyward.

For those who understand uranium’s unique characteristics and cyclical nature, current market conditions present an exceptional opportunity. While timing perfect entry points remains challenging, the confluence of factors we’re seeing today suggests we’re approaching another significant move in the uranium market. The key lies in maintaining perspective and understanding that this market’s movements often exceed even the most optimistic projections once they begin.

Hope you all prosper and enjoy the ride.