Latest / Bull Market Conversations with Fexingo: Rallies, Momentum, and Riding Market Strength / Why Uranium Miners Are the Unsung Leaders of This Bull Market
Transcript
- Lucas: Let me start with a number that caught my eye this week. The S&P 500 is up about 1.6 percent over the last five days. That's solid. But there's a corner of the market that's quietly up more than double that over the past month, and it has almost nothing to do with AI or cloud computing. Luna: You're talking about uranium miners, aren't you? Lucas: Exactly. The uranium mining ETF, ticker U-R-A, is up roughly 12 percent in the last month. Cameco, the biggest publicly traded uranium producer, is up around 15 percent over the same stretch. And this isn't a one-week pop — this has been building for months. Luna: So what's driving it? I remember a few years ago, uranium was this niche trade that spiked on a Reddit squeeze and then fizzled. This feels different. Lucas: It is different. The 2021 spike was mostly financial engineering — the Sprott Physical Uranium Trust went public and started buying up spot uranium, which squeezed anyone who was short the commodity. Fun for a few weeks. But this cycle is driven by real demand. There are roughly 440 nuclear reactors operating globally today. Another 60 or so are under construction, most of them in China and India. And the fuel supply has been structurally underinvested for a decade. Luna: Right, because after Fukushima in 2011, everyone assumed nuclear was dead. New mines weren't developed, existing ones shut down. Lucas: Exactly. Global uranium production peaked around 2016 and has been declining since. In 2025, total primary production was about 130 million pounds. But reactor demand was closer to 180 million pounds. That gap gets filled by secondary supplies — government stockpiles, down-blended weapons-grade material, recycled fuel. But those sources are finite. Luna: So we're effectively drawing down inventories year after year. That's not sustainable. Lucas: It's not. And that's what the market is starting to price in. The spot uranium price has moved from the mid-50s per pound a year ago to just over 80 dollars today. That's still well below the incentive price needed to bring new mines online — most analysts think you need 90 to 100 dollars to justify a new greenfield project. Luna: So the thesis is basically: demand is growing, supply is shrinking, inventories are dropping, and prices need to go higher to incentivize new production. Lucas: That's the core. But what makes it especially interesting right now is the policy backdrop. The U.S. House passed a bill in late 2025 that bans imports of Russian uranium — which supplied about 23 percent of U.S. enrichment services — and the Senate is expected to follow. The White House has already created a 1.5-billion-dollar strategic uranium reserve. And the Department of Energy just announced a contract to restart the Palisades nuclear plant in Michigan, which closed in 2022. Luna: That's the first-ever restart of a retired nuclear plant in the U.S., right? Lucas: Correct. It's a massive signal. And it's not just the U.S. Japan has restarted several reactors since Fukushima. South Korea just announced plans to increase nuclear's share of its power mix from 27 percent to over 30 percent by 2030. Even France, which already gets 70 percent of its electricity from nuclear, is talking about building new plants. Luna: So the demand story is global, it's bipartisan in the U.S., and it's tied to energy security. That's a powerful combination. Lucas: It is. And the market structure adds a layer. The uranium market is thin and opaque. Most supply is contracted long-term to utilities. Only about 15 to 20 percent trades on the spot market. So when a big buyer like the Sprott trust or the U.S. government steps in, it can move prices sharply. Luna: Which brings us back to Cameco. Are they the best way to play it? Lucas: Cameco is the bellwether. They own the Cigar Lake mine in Saskatchewan, which is one of the highest-grade uranium deposits in the world. They're ramping up production to about 18 million pounds per year. But they're also exposed to regulatory risk in Canada and Kazakhstan. There's also the Sprott Physical Uranium Trust itself, ticker S-R-U-U-F, which just buys and holds physical uranium — it's a pure bet on the spot price. Luna: And there are smaller players too, like Energy Fuels and Ur-Energy. But those come with more operational risk. Lucas: For sure. The thing to watch is the term price — the price for delivery in two or three years. That's what utilities use to sign contracts. If the term price breaks above 85 dollars, that's a strong signal that the bull market has legs. Right now it's around 78, so close but not there yet. Luna: You mentioned the Sprott fund buying. That's a bit like the gold ETF effect in the 2000s, right? A financial instrument creating physical demand. Lucas: Exactly analogous. And that brings up an important nuance. The bull market in uranium isn't just about miners — it's also about the financing and royalty companies. Names like Royal Gold and Kazatomprom, the Kazakh state producer, are less volatile. But the real leverage is in the producers and developers. Luna: If our conversations have helped you think about a decision differently — whether it's an investment, a career move, or just how you understand markets — we want to keep these conversations accessible to everyone. We deliberately don't run ads on these. Lucas: We do it because interference-free analysis is what we'd want as listeners. If that's valuable to you and you want to support the choice, the easiest way is buy me a coffee dot com slash fexingo. No pressure, no perks — just knowing it helps keep the show ad-free. Luna: Exactly. And it genuinely makes a difference. OK, back to the uranium trade. Lucas: Alright, so where does the risk lie? The biggest risk is policy reversal — if a future administration decides to slow down nuclear support, that would dampen the appetite. But even then, the supply deficit is structural. It would take years to reverse. Luna: Another risk is if a major secondary source, like the Russian HEU deal, gets extended. But that seems unlikely given the current geopolitical climate. Lucas: Right. And then there's the technology risk from small modular reactors — if SMRs get cheaper faster than expected, they could actually increase uranium demand because they use the same fuel, just in smaller quantities. So net-net, it's still bullish. Luna: What about the timeline? Is this a six-month trade or a multi-year theme? Lucas: I think it's multi-year. The lead time for new mines is 7 to 10 years. Existing mines are operating near capacity. So the supply gap doesn't close quickly. Even if every planned mine came online tomorrow, we'd still be short. That's why the price has to go higher. Luna: So for someone who's been watching tech dominate all the headlines, this is a genuinely different way to participate in the bull market — a commodity that's tied to a secular growth story but with its own idiosyncratic supply dynamics. Lucas: Exactly. It's not correlated with the NASDAQ. It's not correlated with the economy, really — utilities buy uranium regardless of GDP growth because reactors run around the clock. So it offers diversification. And it's a real asset with a physical market, not a narrative stock. Luna: Alright, let's leave listeners with a concrete number to track. What's the one data point that tells you whether this trade is still on? Lucas: The term uranium price for 2028 delivery. If it crosses 85 dollars, the bull case gets a lot stronger. If it drops below 70, it suggests utilities are betting on new supply or lower demand. That's your canary. Luna: Good one. And if you want to dig deeper, the World Nuclear Association publishes a yearly supply-demand report that's free and very readable. Lucas: Solid recommendation. So to round it out: uranium miners are leading this bull market from an unexpected corner. The fundamentals are real, the policy tailwinds are strong, and the market structure amplifies price moves. It's not for everyone, but for those who do their homework, it's a compelling addition. Luna: And one more thing — we'll keep tracking this space in future episodes, because this theme is still early. Lucas: Absolutely. Thanks for listening — we'll be back tomorrow with another slice of the bull market.