Uranium price has drive, big holder Sprott says

The uranium market has momentum on its side as it looks to end 2025 on a strong note, with several catalysts lined up to fuel a sector seen as critical for the future of energy, says Sprott.

The firm with the world’s largest holding of the heavy metal, the Sprott Physical Uranium Trust (TSX: U.U for USD; U.UN for CAD), listed three key developments that could lift its price. They are the U.S. government’s critical minerals policy, accelerating demand for the nuclear fuel, and concerns surrounding supply, Sprott said in a report on Thursday. 

The Trump administration intends to stockpile more uranium to alleviate a persistent supply gap for U.S. utilities and the country’s heavy reliance on foreign supply, in particular from Russia, Sprott analysts led by Jacob White said. The plan, if enacted, could result billions of dollars in funding towards building a secure uranium supply and the required nuclear technologies, reinforcing a bullish outlook for the sector, Sprott said.

Secondly, Sprott said it’s increasingly confident in uranium’s long-term fundamentals, especially after the World Nuclear Association’s (WNA) September symposium. It pointed to a WNA report that outlined lofty demand expectations, from the current 175 million lb. of uranium oxide (U3O8) equivalent annually to 391 million lb. by 2040, representing a 124% growth.

Importantly, the WNA forecast was more than double its previous, highlighting a surge in optimism over nuclear fuel use, especially with a “new class” of demand from hyperscalers such as Microsoft.

Lastly, Sprott’s sentiment is reinforced by a structurally tight supply amid expectations of declining output from the world’s top producers such as Kazatomprom (LSE: KAP) and Cameco (TSX: CCO; NYSE: CCJ), as well as execution risks across the development pipeline. Also, it stated that the WNA report had missed some of the key production cuts, meaning the uranium market could be even tighter than headline figures suggest.

Spot uranium was trading around $79.75 per lb., down 1.7% on Thursday and still 4.2% below where it was a year ago, according to Trading Economics. Prices spiked in 2024 reaching $107 per lb., but then corrected by March 2025 to near $63 per lb. as some demand slackened.

Despite Sprott’s bullish outlook, building or restarting nuclear reactors takes years, often decades, and requires billions in capital and political will — not to mention public acceptance and regulatory approvals that can drag on for years.

Many announced projects are still just plans on paper. Even if every one went ahead, they wouldn’t start drawing fuel until well into the 2030s. In the meantime, supply bottlenecks are easing as mines in Kazakhstan, Canada and Africa ramp up, suggesting the market may face more near-term uranium than it needs.

Bullish outlook intact

Sprott noted market sentiment turned positive in September as fresh capital flowed in and supply tightened, leading to an 8% rise in uranium prices during the month and a rebound to $82 per pound.

The rebound followed months of dislocation, which saw uranium prices reach a maximum spread of $17/lb. This, as Sprott said, was not “sustainable” for a market that is in a structural deficit position.

Doubling down on its bullish outlook, the Sprott Physical Uranium Trust has continued to buy up uranium, bringing its total holdings to over 72 million lb. — maintaining its position as the number one holder. Year to date, the trust has gained about 8.7%, with a market capitalization exceeding $6 billion.

Meanwhile, uranium equities have delivered impressive performances, with the Sprott Uranium Miners ETF rising by over 50% this year. Over the past five years, uranium and related equities have significantly outperformed other asset classes, according to Sprott.