ASX uranium stocks BOE and PDN are struggling, but uranium’s tailwinds are growing

There are two elephants in uranium’s room

The immediate catalysts for the uranium price, i.e., the spark for its recent recovery, lies in the latest updates from the sector’s two dominant producers, Cameco (TSX: CC0) and Kazatomprom (LSE: KAP).

When it comes to global uranium supply, Cameco and Kazatomprom dominate the conversation. Between them, these two giants account for more than 40% of primary production worldwide. Any change in their production outlook has immediate ramifications for the market.

Cameco trims production guidance at McArthur River

• Last week, CCJ trimmed its 2025 production guidance for the flagship McArthur River mine by around 3.5 million pounds, citing development delays and technical issues with ground freezing.
• In a research note on the development*, Morgan Stanley raised its forecast uranium market deficit in 2025 (i.e., demand is greater than supply) to 14 million pounds from 10 million pounds. This represents a substantial tightening in an already thinly-balanced market.

Kazatomprom’s acid issues persist, SUAs down

• Last week, KAP’s latest quarterly update also helped spur the recent uranium price rebound as it declined to provide a specific target range for 2026, instead flagging that it would exercise a 20% “downflex” option on production (a clause that allows KAP to adjust output by up to 20% below its licensed production levels, giving it flexibility to cut supply without breaching its regulatory obligations).
• In a research note on the development*, Canaccord Genuity interpreted this as a sign of deep uncertainty, writing: “The actual production outcome is dependent on (constrained) acid supply and alleviation of other logistical constraints”
• KAP also highlighted a ~10% decrease in the subsoil use agreement (SUA) levels for 2026. Subsoil use levels are the state-approved maximum production quotas that KAP can extract under its licenses in Kazakhstan. A ~10% reduction for 2026 means the government has formally lowered the ceiling on how much uranium the company is allowed to mine. This is not just guidance or a temporary operational issue – it’s a legally binding cap on output.

Together, these recent developments have underscored how sensitive uranium is to relatively modest production shifts at Cameco and Kazatomprom. With global stockpiles already thin, quarterly updates from these majors can set the tone for prices across the entire sector.

Uranium market supply factors

Looking past last week’s news items, these are the key supply-side factors generally driving the uranium price. I have labelled each as a short-term or long-term issue.

Acid shortages (short term)

One of the most critical constraints in uranium mining is the supply of sulphuric acid, a vital reagent for in-situ recovery processes. Without sufficient acid, uranium ore cannot be leached effectively, and production stalls.

The situation has come into sharp focus in Kazakhstan, where Kazatomprom relies heavily on acid to drive output. Domestic production has slowed, imports are uncertain, and plans for new capacity are already under pressure. This bottleneck underscores how dependent uranium supply is on industrial inputs that fall well outside the direct control of miners.

Latest developments:

• Canaccord reported that KAP’s “domestic acid production has slowed since Q1”, with year-to-date output up just 4% compared with last year after a strong start.
• Imports from Russia and logistical bottlenecks add further uncertainty.
• The planned captive acid plant in Kazakhstan, scheduled for 2027, may face delays despite early site works.

Operational issues and production delays (short term)

Even when acid is available, uranium mines face frequent operational setbacks. Technical complexity, permitting hurdles, and infrastructure gaps all play a role in delaying output.

Latest developments:

• Budenovskoye, one of KAP’s key projects, has revised down its production profile due to delays in bringing new wellfields and processing facilities online.
• CCJ’s McArthur River issues highlight how technical setbacks can suddenly remove millions of pounds from global supply.

Lack of major supply coming online (long term)

Beyond the near-term bottlenecks, a deeper problem looms: The global pipeline for new uranium supply is dangerously thin. The uranium price has generally traded below the incentive price for over a decade – this is the price level that makes it economically viable for new supply to come online. This means there has been a pervasive lack of investment in new supply across the industry for a prolonged period.

The lack of near-term supply will be critical in shaping the uranium price over the next few years according to Citi. In a research note on uranium released last week*, the broker noted that constrained supply, along with “dwindling inventories” would become one of the “most significant factors in uranium price determination”.

Citi observed that a lack of any new mine development that would result in “meaningful uranium supply in the next five years” creates a “significant risk for balances” and will almost certainly create upside pressure on the uranium price.

Back to those elephants. Forget new supply, there’s plenty of known pounds in the ground owned by Cameco and Kazatomprom. So, why can’t they just ramp up production as soon as the uranium price rises – therefore keeping a lid on any price rally? 🤔

Canaccord has a view on this, noting that it’s a real possibility, but probably not this decade. The broker believes that the two major producers’ “value over volume” strategy – which aims to deliberately keep production lower than maximum capacity to prevent flooding the market and to preserve resources in the ground for when the uranium price recovers – is unlikely to unwind before 2030. From there though, the broker believes the majors will look to plug the supply demand gap and maintain their market share.

Uranium market demand factors

These are the key demand-side factors generally driving the uranium price. Again, I have labelled each as a short-term or long-term issue.

Sprott is still hoovering up pounds (short term… long term?)

The Sprott Physical Uranium Trust has become a market-moving buyer, hoovering up pounds and holding them off-market. In its most recent uranium research note, Morgan Stanley reported that Sprott has purchased 2.3 million pounds of uranium since June after raising $200 million, increasing spot demand and tightening availability.

Regulatory framework grows more constructive (long term)

One of the most striking shifts over the past 12 months has been the policy embrace of nuclear energy. Once sidelined by safety concerns and political hesitation, nuclear has now been recast as a strategic pillar of energy security and decarbonisation.

In the US, regulatory and legislative changes are laying the groundwork for a major expansion of nuclear power. In its most recent research note on uranium, Citi pointed out that President Trump has signed four executive orders under the Defense Production Act to “aggressively scale US nuclear energy, positioning it as a national security priority”. Measures include faster approvals, reform of the Nuclear Regulatory Commission, and funding for enrichment and recycling, while state-level initiatives are proliferating, with New York, Virginia, and others advancing plans for nuclear expansion.

Similar signals are emerging at both US and global financing institutions – it’s getting easier to secure the necessary funding to advance new nuclear energy projects. Much of this is due to the World Bank recently lifting its ban on supporting nuclear projects. Such changes provide not just legitimacy but also financial support, making new projects more viable and extending the lifespan of existing reactors.

Reactor development continues unabated (long term)

Global reactor development remains the backbone of long term uranium demand growth. China leads the charge, with an ambitious buildout that is set to make it the owner of the world’s largest nuclear fleet within a decade. Each new reactor represents decades of locked-in uranium demand, and with construction pipelines expanding, the outlook is for steady consumption growth.

China’s nuclear energy aspirations:

• China is at the forefront, with 58 reactors in operation and 34 under construction.
• Citi estimates Chinese utilities will consume 35 million pounds of uranium in 2025, rising to 58 million pounds by 2030.
• Cumulative demand from China alone could reach 650 million pounds by 2035.
• China’s uranium imports already exceed domestic production by a wide margin, and stockpiles – while large – will eventually draw down.

SMRs and enrichment overfeeding could be game changers (long term)

Small modular reactors (SMRs) are often presented as the nuclear industry’s future – compact, flexible, and capable of being deployed at scale. Their commercialisation could add significantly to uranium demand, but the story doesn’t stop there. A more immediate and underappreciated factor lies in enrichment. At times of high enrichment costs, enrichers “overfeed” their plants with more uranium than technically necessary, raising consumption above baseline needs.

Citi warns this dynamic, combined with SMR adoption, could dramatically reshape demand balances in the coming decades. The broker forecasts around 25 SMR projects will be commercialised globally before 2035, with recent announcements by major US tech giants like Microsoft and Amazon – who are investing in nuclear assets to power their data centers – sparking a new source of demand..

On the overfeeding topic, Citi believes this will drive enrichers to consume extra uranium feedstock, tightening supply-demand balances. The habit persists when uranium prices are relatively cheap compared to enrichment costs, the broker noted. Enrichment overfeeding “is not fully accounted for in uranium balances at the moment” it went on to say.

Conclusion

In the short term, uranium prices will continue to respond to quarterly production updates from the industry’s two heavyweights. As we saw last week, Cameco’s and Kazatomprom's disclosures can cause the price to blip higher within days. But investors should be mindful that such moves cut both ways: If production bottlenecks are resolved, the supply outlook could improve by the next update – and prices will dip.

The longer-term picture is more compelling. Acid shortages, operational delays, and a scarcity of new mines mean supply growth will struggle to keep pace with growing demand. That demand is being driven by a combination of institutional buying, regulatory support, reactor buildouts, and the disruptive potential of SMRs and enrichment dynamics.

Investors would do well to remember that uranium’s volatility is both a risk and an opportunity. Short-term turbulence will remain a feature, but the structural forces identified by here suggest that the long-term trajectory is likely skewed to the upside.

Stay tuned 📢 On Monday, in Part 2, we’ll check out the latest broker views and technical analysis for BOE, PDN and several other major ASX uranium stocks.

1. Canaccord Genuity, "Kazatomprom - Production outlook unchanged, but we remain cautious", 29 August 2025.
2. Citi Research, "Global Commodities", 29 August 2025.
3. Morgan Stanley, "Commodity Matters - Uranium Disruptions Adding Up" , 29 August 2025.

This article first appeared on Market Index on Friday 5 August 2025.