If you only looked at the price of the fuel, you'd think the nuclear trade has never been better. Long-term uranium prices are sitting at $96/lb, an all-time record and up ~12% YTD, taking out the $95/lb high set in mid-2007 at the peak of the last uranium mania (per UxC data compiled by TD Cowen). Spot has followed along to roughly $90/lb, up ~11% YTD.
If, however, you looked at anything with a ticker attached to it, you'd think the nuclear renaissance had been quietly cancelled somewhere between the "AI will need infinite power" phase and the "wait, who's paying for all this capex?" phase.
That, in a nutshell, is the disconnect TD Cowen's uranium team (Craig Hutchison and David Liang) highlights in its two latest Uranium Monitors: the commodity is making all-time highs, while the equities, the SMR darlings and even the IPO pipeline are going in the opposite direction. And the cause, at least in the short run, is the same one that kills every rally in a physical market eventually: the buyers are balking.
A record... on thin volume
Recall that when we first flagged the record term print on Sep 10, TD noted the term price rose $2/lb w/w "despite thin volume," and that as of Aug 31, term contracting volumes were down ~15% y/y at just over 38Mlbs. TD's main hope at the time was that the World Nuclear Association Symposium in London (Sep 9-11), where utilities, fuel-cycle players and policymakers all gather, "could be a catalyst to spur increased trading volumes."
It sort of was. Term volumes rose to 42.2Mlbs by Sep 15, which narrowed the y/y shortfall to ~3%. Still, per TD's latest note, what companies heard from utilities is not exactly the stuff of a buying frenzy:
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