The uranium market is currently experiencing signs of a cooling period despite earlier price gains. After a notable surge, spot prices have recently declined, and there are concerns regarding oversupply in the near future.
### Declining Spot Prices
Uranium prices saw a substantial rise during the June quarter, driven by President Trump’s Executive Order and a significant US$200 million capital raise by the Sprott Physical Uranium Trust (SPUT). However, this momentum has since waned, with prices dropping approximately US$7 per pound by early July, falling below levels present at the time of SPUT’s fundraising announcement.
This decline aligns with expectations that SPUT will complete its 2.5 million-pound inventory purchase programme by mid-July, which may reduce purchasing pressure. Additionally, the period of June to August is typically weak for utility contracting, further contributing to the downward price trends.
Analysts in Energy and Resources (E&P) have modified their forecasts, raising the base spot price estimate to US$75 per pound for the latter half of 2025. After this, a long-term price assumption of US$70 per pound is expected from 2026 onward.
### Anticipated Supply Surplus
E&P analysts predict a balanced uranium market for 2025; however, they anticipate a slight surplus of 2-3%—approximately 4-6 million pounds annually—in the years 2026-2027. This forecast is contingent on ongoing production growth from Kazakhstan, the world’s leading uranium producer.
The upcoming first-half results from Kazatomprom, expected around 22 August, are crucial for assessing production levels and the supply of sulphuric acid, essential for uranium extraction. E&P estimates suggest Kazakhstan will produce 63.5 million pounds in 2025, increasing to 71.5 million pounds in 2026, as growth projects ramp up.
The primary risk regarding this production outlook involves possible disruptions, especially concerning supplies of sulphuric acid, which have previously constrained uranium output in Kazakhstan. However, improvements are anticipated beginning in 2026 with the commissioning of EuroChem’s new facility.
### Diverging Australian Uranium Stocks
There has been a notable shift in the performance of major Australian uranium players, Boss Energy and Paladin Energy. Initially, Boss outperformed Paladin by 85% in the first half of 2025 but has since seen a 23% decline relative to its counterpart from early June.
E&P attributes this performance reversal to changes in investment flows, particularly with Paladin returning to the S&P/ASX 100 index and a shift towards perceived value investments. The research firm prefers Boss Energy with a neutral rating and a target price of A$3.20 over Paladin, which carries a negative rating and a target of A$5.00.
### Rising Cost Pressures
Boss Energy is likely to face upward pressure on its cost guidance ahead of its quarterly results in July. E&P believes the consensus estimate of cash costs at A$39 per pound for FY26 may be overly optimistic, as recent insights suggest that higher reagent consumption is nullifying operational cost savings.
This trend could lead to increased long-term cost projections, with E&P estimating A$33 per pound for FY27 and beyond. Investors may be looking for a more compelling entry point in light of high implied prices across uranium stocks, which currently range between US$75 to US$80 per pound.
### Key Market Catalysts
Uranium investors should keep an eye on significant upcoming events, including FY26 guidance updates from Boss in July and Paladin in August. Additionally, potential mergers and acquisitions involving Boss and updates on growth projects from both firms are expected in the latter half of 2025.
The sector’s high short interest, approximately 15%, poses a risk to investors maintaining conservative views on the sustainability of current uranium prices, as highlighted in E&P’s analysis. As developments unfold, vigilance will be key for stakeholders in navigating the evolving landscape of the uranium market.
