Market Insights: Special Report - Uranium: The Fuel AI Can't Rush
Milestone Wealth Management Ltd. - Oct 20, 2026
October 19, 2026 · Steve Nielsen, Chief Investment Officer
Two prices, one message
Uranium’s long-term contract price just set a record, even as the headline spot price has gone sideways. Utilities buy most of their fuel on multi-year contracts, and that price reached about US$96–97/lb this fall, above its 2007 peak (1, 2). Spot, a thin market for small top-up purchases, sits near US$90/lb.
We read the gap as a signal, not a contradiction. Spot lost its biggest buyer when the Sprott Physical Uranium Trust began trading at a 10–12% discount to its assets, which stops it from raising money to buy pounds (3, 4). The contract market, where reactors actually get fuelled, keeps climbing.
AI matters, but mostly after 2028
AI is real support for nuclear power, but it adds little actual uranium demand before 2030. Announced hyperscaler nuclear deals total up to 13 GW (5). About 6.9 GW are contracts with existing plants: life extensions, uprates and the Three Mile Island restart. The rest depends on small reactors not yet built.
By our math, a large reactor burns roughly half a million pounds of uranium a year. New AI-linked capacity online by 2028 adds perhaps 1–3 million pounds, about 1% of world demand. AI’s bigger effect is indirect: 20-year contracts keep existing reactors running, and Washington has backed an $80 billion partnership with Westinghouse for new reactors.
Two other forces matter more for 2027–28. China targets 110 GW of nuclear capacity by 2030, up 76% from last year, though it has missed targets before (6). And US waivers for Russian enriched uranium end January 1, 2028; the US drew about 26% of its uranium from Russia in 2025 (3). Replacing that forces Western enrichers to run harder, which consumes more raw uranium.
Supply can’t respond before 2030
Higher prices have produced surprisingly little new uranium. Since 2020, prices have roughly tripled while mine output rose about 60 million pounds a year, mostly from restarted mines (1). New mines typically take 15–20 years from discovery to production.
Near-term supply is fragile. Kazakhstan’s Kazatomprom, the world’s largest producer, has pushed a key sulphuric acid plant to between late 2027 and early 2028, and acid prices have tripled on Strait of Hormuz disruptions (7). Cameco’s Canadian output fell 5% in the first half after May flooding, and Saskatchewan’s NexGen Arrow project isn’t expected to produce until about 2030 (2, 3).
Meanwhile, utilities have under-bought. Over the past five years they contracted about 589 million pounds against roughly 815 million consumed (4). US contract coverage falls from about 60% to 9% between 2030 and 2033, and fuel is bought years ahead, so that buying has to start in 2027–28.
Our 2027–2028 outlook
We expect uranium to grind higher, with contract prices leading and spot catching up. Our base case has spot averaging roughly US$95–105/lb in 2027 and US$100–115/lb in 2028.
Base case: uranium around $100–115 by 2028, from about $90 today
Average spot price scenarios, US$/lb. Probability-weighted: $103 in 2027, $112 in 2028.
| Scenario | Probability | What has to happen |
|---|---|---|
| Base | 50% | Utilities step up contracting as coverage gaps near; spot converges toward the contract price |
| Bull | 30% | A buying rush by utilities or tech firms, a supply disruption, or financial buyers return |
| Bear | 20% | AI spending retrenches, markets turn risk-off, or supply and inventories prove ample |
Our base case sits between UBS (US$95 in 2027, US$100 in 2028) and Barrenjoey (US$110 in 2027), and below Bank of America’s US$130 average for 2027 (2, 8).
What would change our view
The clearest warning would be the contract price turning down, a sign utilities feel well supplied. Other risks include a pullback in AI spending, which investors increasingly worry about, and a broad risk-off market with US 10-year yields above 5% (8). Inventories could also prove easier to sell than they look.
Uranium shares are far more volatile than the metal itself. Large producers sell much of their output on multi-year contracts, so higher prices reach their earnings gradually. Physical uranium funds can also trade well below the value of their holdings, as Sprott’s trust does today.
Sources
- Sprott: Record Term Prices Mark a New Phase for Uranium (Sept 24, 2026)
- FNArena: Uranium Week, Shares Down, Outlook Unchanged (Oct 13, 2026)
- Investing News Network: Uranium Price Trends, Q3 2026 Review (Oct 12, 2026)
- The Traders Spread: Uranium Price Prediction (Aug 30, 2026)
- Carnegie Endowment: Beyond the Hype, Hyperscaler Nuclear Commitments (June 2, 2026)
- Bloomberg via Energy Connects: China Approves $25 Billion Nuclear Expansion (July 31, 2026)
- World Nuclear News: New Realities for Kazatomprom (Aug 24, 2026)
- Investing.com: BofA Raises Uranium Price Forecast (Aug 6, 2026)
- World Nuclear Association: World Nuclear Fuel Report 2025
Prices are in US dollars per pound of U3O8. This commentary is for information only and is not a recommendation to buy or sell any security. Forecasts are estimates and may not materialize. Milestone Wealth Management Ltd. or its clients may hold positions in companies mentioned.
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