Jefferies raises long-term uranium prices outlook

Investing.com -- Jefferies has raised its long-term uranium price forecast to $95 a pound, from $70, arguing that higher costs and execution risk mean current pricing is too low to finance the new supply the market will need.

The brokerage said the nuclear fuel continues to draw policy backing. "Uranium continues to benefit from geopolitical support for Nuclear investment and growth," analyst Mitch Ryan wrote, adding that today's incentive pricing has delivered enough supply for current requirements but that incumbent producers are resisting lower-priced contracts.

Developers accounting for roughly 20% of supply between 2026 and 2035 have yet to secure major contracts, Jefferies said, while higher costs, capital intensity and execution risk lift the pricing needed to bring projects forward. Major producer unit costs have risen 83% to 184% over five years, according to the note.

Jefferies expects primary production to reach 243.4 million pounds in 2033 before easing, with China driving 74% of reactor capacity growth as its requirements more than double.

Secondary supply is seen falling sharply as enrichment dynamics reverse, with renewed access to Russian enrichment flagged as the principal downside risk.

"Our revised US$95/lb forecast reflects the economics required to finance replacement supply," the analyst wrote.

On positioning, Jefferies said it favors a balanced approach. "We prefer a portfolio strategy that decouples individual execution risk while retaining leverage to current and future market dynamics," Ryan said.

Its sector preferences are Paladin and NexGen, combining current production with longer-dated development leverage.

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