Latest / The Commodities Economy with Fexingo: Oil, Gold, Wheat, and Raw Material Markets / Why Uranium Is Quietly Outperforming Every Commodity in 2026
Transcript
- Lucas: I want to talk about a commodity that's quietly up 37 percent year-to-date and barely anyone is paying attention. Luna: Let me guess—uranium. Because that's the one everyone forgets until it spikes. Lucas: Exactly. And the spike has been anything but quiet if you're actually watching the physical market. Uranium spot price just touched 87 dollars a pound. That's the highest since the 2007 bubble peak. Luna: But 2007 ended with a crash. What's different this time? Because I remember that story—everyone piled into juniors, then Fukushima hit and it collapsed. Lucas: The difference is structural supply deficit versus speculative excess. In 2007, the rally was almost entirely financial demand—hedge funds piling into physical uranium ETFs, pushing the spot price to 136 dollars. The actual utility demand wasn't growing that fast. This time, you have real physical deficits. Global reactor demand is at about 190 million pounds annually, and primary supply is struggling to hit 150 million. Luna: So the math is pretty simple. Forty million pound gap that has to be filled by secondary sources—downblended HEU, inventories, that stuff. But those are shrinking. Lucas: Right. The Russian HEU agreement expired years ago, and governments aren't releasing strategic stockpiles the way they used to. Meanwhile, Kazatomprom—the world's largest uranium producer—has been missing production guidance. They came in about 10 percent below plan in 2025, and their 2026 guidance is even weaker. Luna: And Kazatomprom is Kazakh. So there's also the geopolitical overlay—Kazakhstan has been cozying up to Russia, Western utilities are nervous about supply reliability. That's a real factor now. Lucas: It is. The U.S. just passed the Nuclear Fuel Security Act, which explicitly aims to reduce reliance on Russian and Chinese fuel. And you're seeing utilities lock in contracts at much higher prices than they were five years ago. The average term contract price last year was around 52 dollars a pound. Now it's pushing 70. Luna: So the market is repricing the entire term curve. That's more durable than a spot spike because utilities are committing for years, not weeks. Lucas: And that's what I think makes this rally different. The 2007 run was a spot bubble that collapsed when financial demand evaporated. This time, the financial demand is actually smaller relative to the physical deficit. The Sprott Physical Uranium Trust holds about 63 million pounds—that's not chump change, but it's not driving the whole bus. Luna: What about the supply side? Are any new mines coming online to fill that gap? Lucas: It's slow. Cameco's Cigar Lake is back to full production, but they've had their own operational issues. New projects like the McArthur River restart are ramping, but getting a new uranium mine permitted takes eight to twelve years. There's nothing in the pipeline that can materially close the gap before 2030. Luna: So we're looking at a sustained deficit. Meanwhile, the narrative around nuclear has shifted completely—it's now a climate solution, not a liability. The U.S. Department of Energy is funding advanced reactor designs, NuScale and TerraPower, Bill Gates's company, they're moving toward commercial deployment. Lucas: And that adds demand expectations, even if those reactors come online slowly. Each small modular reactor needs about the same fuel as a traditional plant—just in smaller batches. So even a modest buildout of new reactors adds 10 to 20 million pounds of annual demand by the early 2030s. Luna: But here's the twist—uranium mining stocks are not rallying as much as the physical price. Cameco is up maybe 15 percent year-to-date. That's decent, but not 37 percent. Lucas: That's a classic sign that investors are skeptical about whether miners can actually convert high spot prices into earnings growth. Cameco has fixed-price term contracts that cap some of their revenue. And the market is worried about cost inflation—labor, reagents, energy—eating into margins. Luna: So the best way to play this might be the physical trusts themselves, not the equities. Sprott's trust trades at a premium to NAV, but that premium has compressed recently. Lucas: Yeah, the premium was as high as 35 percent in 2023. Now it's closer to 5. That reflects more efficiency in the market—you can buy physical exposure more directly now through ETFs and trusts. But it also means less speculation baked in. Luna: Which makes the current price action healthier in a way. The physical price is rising because of real demand, not just financial flows. Lucas: Exactly. And look at the latest CPI print we got—April headline CPI at 332.4, up from 330.3. Inflation is still sticky. Commodities like uranium that have a real supply story tend to hold up better in that environment than, say, industrial metals that are sensitive to a growth slowdown. Luna: And copper—which we've talked about before—is basically flat on the week. Uranium is the one that's actually moving. Lucas: It's also moving because of a catalyst that just happened: the U.S. House passed a bill to ban imports of Russian uranium. That's been telegraphed, but the actual legislation passing changes the calculus for utilities that were still buying from Rosatom. They have to find new supply. Luna: That's roughly 20 percent of U.S. enrichment demand that has to be replaced. And there's not enough domestic capacity to do it overnight. So you get price pressure across the whole fuel chain—uranium itself, conversion, enrichment. Lucas: Speaking of which, you can draw a parallel to what happened with oil and the Strait of Hormuz. The headline this weekend is that oil exports through the Strait might not return to pre-war levels even after the Iran conflict ends. That's a supply disruption that doesn't easily heal. Uranium's supply disruption is less dramatic, but it's just as persistent. Luna: Good comparison. With oil, the market is forward-looking and pricing in a potential resolution that doesn't fully restore supply. With uranium, the market is pricing in a structural deficit that no one expects to resolve quickly. Lucas: One more data point: the S&P Global Platts uranium price assessment has been above 70 dollars for 18 straight weeks now. That's the longest stretch above 70 since 2007. And the forward curve is still in contango, which means the market expects prices to stay elevated. Luna: So for listeners who are thinking, 'should I care about uranium?'—the answer is yes, because it's a rare example of a commodity where the fundamentals are genuinely bullish, not just reacting to macro noise. Lucas: And if walking through the economy with us has made something click, we do want to mention—we deliberately don't run ads on these episodes. Not because we're anti-business, but because we want the content to be clean and focused. Luna: Right. So if you find that useful and you want to support the choice to keep it ad-free, there's a link: buy me a coffee dot com slash fexingo. No pressure, just if it matters to you. Lucas: And to come back to uranium—the key question is whether this rally has legs into 2027. I think it does, because the deficit is widening, not narrowing. But we'll keep watching. Luna: And we'll keep you posted. Next week, maybe we dig into what's happening in the lithium market—because that one's been a disaster for bulls. Lucas: It has. Lithium's down 70 percent from its peak. But that's a conversation for another day. For now, uranium's the quiet winner.