BOC International released a research report stating that it maintains an optimistic view on the natural uranium industry due to impending utility company contracts and a long-term supply-demand gap. Near-term catalysts include more proactive government policies, new reactor project approvals in the United States and China, and further contracting activity. The preferred pick remains Kazatomprom, which is attractively valued and has high exposure to uranium prices. Simultaneously, given the increased likelihood of its US assets restarting at above-market prices, the bank has elevated Cameco's priority to the same level as CGN MINING (01164). BOC International's main views are as follows:
Natural uranium has performed strongly since the start of the new year, with the spot uranium price rising by $2 to $83.5 per pound, and major natural uranium ETFs have gained 22% year-to-date.
On January 14 local time, the White House issued a statement outlining efforts to address US reliance on imports of critical raw materials. Natural uranium was specifically mentioned in the announcement as a critical raw material for the energy sector. President Trump decided to initiate negotiations with trade partners to address dependence on imported processed critical raw materials and is considering implementing a "minimum import price/price floor" policy if negotiations fail to meet government objectives. Policies using price floors to support domestic US supply chains and reduce import reliance are not historically uncommon. The most recent example was in July 2025, when the US Department of Defense signed a 10-year minimum purchase price agreement with domestic rare earth producer MP Materials for its neodymium-praseodymium products. If a similar policy is implemented for uranium, it could incentivize investment to restart idled US production mines and explore new mines. This would benefit uranium producers with US assets, including Cameco. On the other hand, if the price floor applies to all imports (or from specific countries), it could benefit a broader range of uranium producers and create a bifurcated market until domestic US supply increases.
Cameco has suspended operations at its US mines (Crow Butte and Smith Ranch-Highland) since the second quarter of 2016. Cameco owns 100% of these assets, and their annual carrying costs (cash and non-cash) are estimated at $14-15 million in 2025. Historically, these projects have cumulatively produced approximately 35 million pounds of uranium via in-situ recovery mining. The bank believes a government price floor mechanism could potentially lead to the restart of these assets, which would be a positive sign for Cameco's natural uranium asset portfolio.
Uranium prices continued their upward trend in December 2025, rising nearly $2 per pound for the month to reach $83.50 per pound. The Sprott Physical Uranium Trust (SPUT) was able to issue new units on every trading day year-to-date, raising a total of $103 million and purchasing 650,000 pounds of uranium. In comparison, SPUT raised a total of $772 million and purchased 8.6 million pounds of uranium throughout the entirety of 2025. The trust has traded at a premium to its net asset value for four consecutive days; this occurred on only 12 out of 251 trading days in 2025. The bank views this strong performance as indicative of improved investor sentiment towards the natural uranium sector, which may persist in the coming months.
Comments