Cameco's Market Outlook: Uranium Supply Gap Signals Price Momentum

Cameco reveals a record gap in utility uranium contracts, tightening supply, and market-linked pricing, signaling strong upward pressure on future prices.

Cameco Corporation has presented a notably bullish assessment of the uranium market's trajectory. Speaking at a recent BMO conference, company executives highlighted a record-setting disparity between the future procurement needs of nuclear utilities and the uranium already secured under long-term contract. They further emphasized that available supply is tightening at a pace exceeding current market expectations. This dynamic raises critical questions about future price formation as utilities are compelled to re-enter the market in force.

Structural Supply Deficit and Utility Pressure

A central theme from the presentation was the unprecedented scale of future uncovered utility demand. Grant Isaac, Cameco's President and Chief Operating Officer, detailed that the "uncovered requirements wedge"—representing uranium volume utilities must yet contract for—is at a historical high. The company identified a persistent structural pattern: since 2012, utility purchases have consistently fallen below replenishment levels. This has systematically drawn down inventories without rebuilding adequate buffers. Cameco argues this creates mounting pressure for utilities to eventually return to the market with significant volume, a fundamental driver for future price discovery.

Constrained Supply Amidst Idle Capacity

Contrary to widespread assumptions of sufficient availability, Cameco challenged the notion of ample supply. The company noted that 30% of its own permitted production capacity remains idled. Global supply is further strained by external disruptions, including the operational shortfall from Orano's mine in Niger.

Providing specific guidance, management forecast production from its flagship McArthur River operation could reach up to 17 million pounds in 2026, still modestly below historical capacity levels. For 2025, total production across all sites was 34 million pounds. Executives did not signal plans for a rapid production ramp-up, instead underscoring a disciplined, market-responsive approach to bringing capacity online.

Contract Structures Reflect Market Exposure

The company offered detailed insight into its pricing strategy. While the long-term uranium price indicator stands at $90 per pound, Cameco stated this "base-escalated" pricing mechanism applies to only about 30% of its contracted volume for the year.

The remaining 70% of its 2025 contract book is tied to market-related terms. These contracts feature rising floor prices in the mid-$70 range and ceiling prices extending to the $150-per-pound zone and beyond. To account for these structures, Cameco has raised the upper limit of its price sensitivity table to $160 per pound.

U.S. Nuclear Ambitions and Financial Performance

Another focal point was the Memorandum of Understanding announced in October 2025 between the U.S. government, Cameco, and Brookfield Asset Management. The agreement targets the construction of eight to ten AP1000 reactors by 2030, backed by a minimum commitment of $80 billion.

Isaac quantified the associated incremental uranium demand at approximately 65 million pounds over a ten-year period. Cameco also anticipates a formal announcement in 2026 regarding the procurement of long-lead items for this ambitious program.

The presentation was supported by strong 2025 financial results. Annual revenue increased 11% to $3.48 billion, with diluted earnings per share of $1.35. The company's 49% stake in Westinghouse contributed adjusted EBITDA of 780 million Canadian dollars, a 61% year-over-year increase. Cameco also raised its annual dividend by 50% and reported a robust liquidity position with $1.2 billion in cash against $1.0 billion of total debt.

Investor response was positive. In the session following the conference, Cameco's share price advanced 1.96% to $118.63, contributing to a weekly gain of approximately 5%.