Jefferies has increased its long-term uranium price outlook to $95 a pound, up from a prior forecast of $70, citing a combination of higher costs and execution risks that, in the bank's view, make prevailing prices inadequate to underpin the new production the market will need.
The brokerage highlighted continued policy support for nuclear power as a backdrop to the market dynamics. "Uranium continues to benefit from geopolitical support for Nuclear investment and growth," analyst Mitch Ryan wrote, adding that current incentive pricing has delivered sufficient supply for present needs but that incumbent producers are resisting lower-priced contracts.
Jefferies noted that developers representing roughly 20% of expected supply between 2026 and 2035 have not yet secured major offtake agreements. The firm said higher costs, greater capital intensity and elevated execution risk all push the price level required to bring new projects to fruition.
According to the note, unit costs for major producers have climbed substantially over the past five years, rising by between 83% and 184%. That increase in production costs is central to Jefferies' argument that a higher long-term price is necessary to finance replacement and incremental supply.
On a production outlook, Jefferies projects primary uranium output to reach 243.4 million pounds by 2033 before easing thereafter. Growth in reactor capacity is expected to be concentrated in China, which the brokerage says will drive 74% of reactor capacity expansion as its uranium requirements more than double.
The firm also anticipates a sharp decline in secondary supply as enrichment dynamics reverse. It flagged renewed access to Russian enrichment services as the principal downside risk to its supply outlook and pricing assumptions.
"Our revised US$95/lb forecast reflects the economics required to finance replacement supply," Ryan wrote.
On investment positioning, Jefferies recommended a balanced, portfolio-based approach. "We prefer a portfolio strategy that decouples individual execution risk while retaining leverage to current and future market dynamics," Ryan said.
The note also identified sector preferences, citing Paladin and NexGen as favored names that combine current production exposure with longer-dated development leverage. The brokerage included ticker movement context in its commentary, noting PDN up 1.35% and NXE up 2.32% alongside references to broader uranium benchmarks.
Market implications
Higher long-term price assumptions shift the economics for developers and investors across the nuclear fuel supply chain, with potential effects on mining companies, utilities securing fuel, and capital markets that finance project development.