Nuclear fuel purchases by U.S. utilities have halved as the date of Trump’s 10 per cent tariff on Canadian energy exports approaches. According to the latest data from pricing firm TradeTech, reactor operators, which typically rely on long-term contracts, are waiting to see the outcome of the tariffs.
As a result of the wait-and-see sentiment in the uranium market, the Sprott Uranium Miners ETF (URNM), an exchange-traded fund that tracks the prices of uranium miners, has tumbled 16 per cent so far this year, more than double the decline in the S&P 500. Shares of Cameco, the world’s No. 2 uranium producer, are down 21%. Meanwhile, uranium futures prices are down about 40 per cent from their February 2024 peak.
On the company’s earnings call last month, Cameco executives noted that if tariffs go into effect, the company may look to shift its business away from the U.S. to other markets, as it has done to develop new customers in Central and Eastern Europe.
According to the U.S. Energy Information Administration, Canada is the largest supplier of uranium to the U.S. in 2023, accounting for 27 per cent of its total supply, followed by Australia and Kazakhstan with 22 per cent each.
Cameco Chief Financial Officer Grant Isaac told an industry conference in Florida in February that there is little danger of fuel shortages for U.S. reactors in the short term. Given the long-term nature of uranium supply contracts, utilities have ample supplies of uranium this year and through most of 2026.
While there are still many utilities that need to meet their fuel needs as soon as 2027 or 2028, the latest market uncertainty has most customers choosing to wait on the sidelines.
Meanwhile, the possibility that Russia-Ukraine ceasefire talks could unleash Russian uranium enrichment capacity (50 per cent of the world’s), was easing supply shortage concerns.
Industry insiders point out that the core reason why the uranium market has not seen a rush similar to the copper market is that it is underpinned by LTAs, mitigated geo-risks and technological substitution shocks, overlaid with buyers’ prudent assessment of the actual impact of tariffs. If the U.S. and Canadian tariff conflict escalates or the Russian-Ukrainian ceasefire agreement breaks down, short-term buying pressure may return.
