Nuclear and renewable resources

Drivers for Uranium Sector Growth in 2Q

• Sprott Physical Uranium Trust (SPUT) $200M Bought Deal.

The Sprott Physical Uranium Trust (SPUT) announced a significant expansion of its bought deal to US$200 million in June 2025, increasing its cash reserves to $236 million for further purchases of uranium oxide (U3O8). This deal has had a notable impact on the uranium market, as it continued to tighten the spot uranium price. The $200 million deal drove a 10% surge in spot uranium prices in June 2025, reaching US$71.75 per pound by July 11, 2025, up 2.87% month-over-month. In addition, the deal signifies strong institutional confidence in the uranium market, which will stimulate increased capital flows into uranium equities. With the removal of a substantial volume from the spot market, SPUT exacerbates the structural supply/demand deficit.

• Impact of AI Data Center power requirements on SMR development and deployment. 

Electricity demand from data centers is projected to more than double by 2030 to approximately 945 terawatt-hours, with AI-optimized data centers quadrupling their energy requirements. Nuclear power’s low-carbon, consistent output is increasingly favored, as in the example of Constellation Energy’s 20-year agreement with Meta Platforms to supply power from its Clinton, Illinois Clean Energy Center. The AI data center rising demand is accelerating SMR development and deployment, which will impact uranium demand, especially for HALEU, the fuel type that will be most used by current SMR designs.

• Impact of Presidential Executive Orders (Eos)signed in May 2025.

In May 2025, President Trump signed executive orders aimed at revitalizing the U.S. nuclear industry, streamlining regulatory processes, and promoting domestic uranium production. The EOs strengthen the ban on Russian enriched uranium imports, and prioritize North American supply chains. The Eos have boosted investor confidence, contributing to a 17–23% surge in uranium equities in June 2025. Spot prices have been supported by expectations of increased U.S. demand, with term contract ceiling prices rising to $130–$150 per pound. The focus on US domestic uranium production will benefit uranium miners and uranium enrichers with US-centric production: 1) Energy Fuels (UUUU); 2) Uranium Energy Corporation (UEC); 3) encore (EU); Cameco (CCJ); Centrus Energy (LEU). All of these equities are in our portfolio and have experienced significant price appreciation in 2Q.

• Stalemate between Utility Fuel Buyers and Uranium Producers.

In 2025, utilities signed only 27 million pounds in term contracts, less than one-third of the replacement rate needed. With term contracting lead times dropping to less than three years and inventories nearing critical levels (approximately two years of reserves against an 18–24-month fuel cycle), pressure is mounting for the utilities to finally resume purchases of long-term contracts. US government policy support of $2.7B to build up the US nuclear fuel supply chain, insentivise action on the part of the utilities.

• Impact of Reactor Life Extensions, New Builds, and Improving Public Sentiment

Lifetime extensions for older reactors are a significant driver for increased uranium demand. The World Nuclear Association projects a 28% increase in uranium demand by 2030, and 50% by 2040. Global reactor construction has significantly increased, with several countries announcing plans for large reactor construction. This is in addition to China’s planned 150 reactor fleet by 2035 (10 per year), and Japan’s 14 reactor restarts following Fukushima. All of the above tighten supply, with mines meeting only 74% of utility requirements in 2022 and the supply/demand deficit continually growing. The EOs amplify this by incentivizing domestic production and reactor development, thereby supporting price appreciation and equity gains.

Conclusions

The uranium market in 2Q 2025 was characterized by tightening supply, driven by SPUT’s $200 million deal, declining inventories, and the U.S. ban on Russian enriched uranium. Demand is also accelrated by AI data centers, SMR development, and supportive Presidential EOs that streamline licensing and incentivize domestic production. We believe the stalemate between utilities and producers is nearing resolution, with a potential contracting surge in late 2025. Leading equities like Energy Fuels, Uranium Energy Corp, Encore Energy, Cameco, and Centrus Energy, all of which are in our portfolio, will benefit the most from the EOs due to their U.S.-centric operations and alignment with policy priorities. Reactor extensions, new builds, and improving nuclear sentiment further underpin a bullish outlook. We believe that our portfolio will closely monitor utility contracting, SMR progress, and EO implementation for further catalysts for the uranium and renewable resources sector.