Uranium Surges 11% in January: ASX Producers in the Spotlight

Uranium spot prices have climbed 11% since the start of January, reaching US$91.10 per pound, the highest level since April 2024. The rally has been fuelled by aggressive physical buying from the Sprott Physical Uranium Trust, which purchased 500,000 pounds in a single day this week, and growing demand signals from Big Tech's nuclear power ambitions. For ASX uranium stocks, the momentum is translating into double-digit gains as investors reassess the sector's outlook.

What's Driving the Uranium Rally?

The latest price spike reflects a convergence of demand tailwinds that have been building throughout 2025. Most notably, technology giants are securing unprecedented volumes of nuclear power to meet the energy demands of AI-focused data centres.

Meta announced agreements earlier this month for up to 6.6 gigawatts of nuclear power through deals with Vistra, TerraPower, and Oklo. This follows the company's 20-year agreement with Constellation Energy, signed in mid-2025. Microsoft's deal to restart the Three Mile Island reactor in Pennsylvania, along with similar arrangements by Amazon and Google, signals that nuclear energy has become essential infrastructure for the AI revolution.

The US government has reinforced this momentum through a strategic partnership with Westinghouse, Cameco, and Brookfield Asset Management, clearing the path for a fleet of new reactors valued at approximately US$80 billion. Additionally, US$2.7 billion in contracts has been awarded to boost domestic uranium enrichment capacity. According to Grid Strategies, US power usage is expected to climb at least 30% by 2030, with data centres driving most of this demand.

Global reactor demand tells a similar story. The World Nuclear Association's 2025 Fuel Report projects uranium requirements rising to over 150,000 tonnes (approximately 390 million pounds) by 2040 under its Reference Scenario, with requirements exceeding 204,000 tonnes under its Upper Scenario. Yet mine development continues to lag.

‍

Supply Constraints Tighten the Market

While demand accelerates, supply is struggling to keep pace. Kazakhstan's Kazatomprom, the world's largest uranium producer, has confirmed it will maintain production curbs for 2026, reducing output by approximately 8 million pounds from initial capacity targets. This cut alone removes roughly 5% of global primary supply from the market. Production halts at the Inkai joint venture due to regulatory issues have added to concerns about reliable supply.

According to the World Nuclear Association's 2025 Nuclear Fuel Report, global mine production currently supplies approximately 140-150 million pounds annually, while reactor requirements exceed 179 million pounds. This structural deficit of 30-40 million pounds has been temporarily filled by secondary supply sources, including inventory drawdowns and material from government stockpiles.

However, these secondary sources are finite. The World Nuclear Association projects their contribution could fall from 14% of total supply in 2025 to just 4% by 2050. For investors, this suggests the supply gap may widen before it narrows.

The Sprott Physical Uranium Trust has responded aggressively, purchasing 1.25 million pounds in the first weeks of 2026 alone, its highest first-quarter buying in three years. The fund's total holdings now exceed 76 million pounds, valued at approximately US$7.2 billion.

ASX Uranium Producers Respond

ASX-listed uranium stocks have started 2026 strongly. Paladin Energy (ASX: PDN) has gained approximately 14% year-to-date, building on production momentum at its Langer Heinrich mine in Namibia, which delivered record quarterly output of 1.07 million pounds in late 2025. Boss Energy (ASX: BOE) rose over 10% in the first trading days of 2026, while Deep Yellow (ASX: DYL) added more than 11%.

Each company occupies a distinct position in the uranium supply chain. Paladin offers established production scale, Boss provides exposure to Australian in-situ recovery operations, and Deep Yellow is advancing its Tumas project in Namibia toward a final investment decision. The diversified approaches reflect varying risk profiles and development timelines.

Key Takeaways for Investors

The uranium sector is experiencing a structural shift driven by AI energy demand, government policy support, and persistent supply constraints. While short-term volatility is likely, the medium-term fundamentals point toward continued tightness.

Investors considering exposure should note that uranium markets can be opaque, and company-level execution risk varies significantly. Operational setbacks have impacted share prices for even the largest producers.

‍

To receive ASR's detailed analysis on resource sector opportunities and market outlook, download our free Top-3 Stocks & Market Outlook Report.

‍