Cameco Strengthens Strategic Advantage Amid Uranium Supply Crunch
Cameco Corporation is currently navigating a significant uranium supply crunch. The company has reported strong financial results for 2025, projecting sustained high uranium prices due to a developing supply-demand deficit. This structural mismatch arises from prolonged under-contracting by utilities and persistent supply challenges, signaling an extended period of elevated price levels.
Cameco’s Strategic Approach to Production
In its recent operational update, Cameco reported a production total of 34 million pounds of uranium for the full year 2025. For the year 2026, output from the McArthur River operation is expected to reach up to 17 million pounds, intentionally kept below historical capacity. This approach demonstrates management’s commitment to patient growth, aligning production closely with market demand.
Key Financial Highlights
- Fourth-quarter earnings per share for 2025 were USD $0.37 (adjusted), exceeding expectations by 14%.
- Quarterly revenue stood at USD $877 million, 9% above forecasts.
- Full-year revenue totaled USD $3.48 billion, marking an 11% increase year-over-year.
- Diluted earnings per share rose 246% to USD $1.35.
- Net earnings surged to CAD $590 million from CAD $172 million in 2024.
- A 50% dividend increase was approved by the board compared to 2024.
- Cameco’s stake in Westinghouse Electric shifted from a USD $218 million loss to a USD $58 million profit.
Tightening Market Conditions
At the BMO Global Metals, Mining & Critical Minerals Conference, Cameco’s President and COO Grant Isaac emphasized the tight market conditions. Utility firms have contracted uranium below the “replacement rate” for over a decade. This has resulted in record “uncovered requirements,” which the company states are not adequately addressed by current supply projections.
Future Pricing and Demand Drivers
Current long-term uranium contract prices are about USD $90 per pound, with market indicators suggesting potential for prices to reach higher levels. Cameco has updated its sensitivity tables, projecting upper limits of USD $160 per pound. The start of 2026 appears promising, with increased market activity and rising contract prices.
U.S. Reactor Partnership Potential
A pivotal factor for future demand is the Memorandum of Understanding established in October 2025. This partnership between the U.S. government, Cameco, and Brookfield Asset Management aims to facilitate the construction of eight to ten new AP1000 nuclear reactors across the United States. This initiative could significantly influence uranium demand, estimating an additional 65 million pounds over a decade.
Market Performance Analysis
Cameco’s share price faced a minor decline of 2.14%, closing at USD $118.63 during the BMO conference amidst a wider market sell-off. However, the stock maintained a weekly gain of 5.08%, showcasing its resilience despite market fluctuations influenced by tariff policy uncertainties.
In summary, Cameco Corporation is strategically positioned to take advantage of the ongoing uranium supply crunch. With a disciplined production strategy and strong financial performance, the company is poised for long-term growth in the uranium sector.
