Heavy Metal: A Deep Dive on the Nuclear Fuel Cycle

What You Need to Know:

• Our full report on uranium analysis covers 97% of global supply.
• Western enrichment capacity is poised for significant expansion, but higher uranium prices and higher SWU prices may be needed.
• Planned enrichment capacity could increase U.S. and European regional supply by ~60%.
• Recycling could help ease future fuel constraints, but conventional pathways also remain uneconomic without higher uranium prices.

We see a constructive backdrop for uranium mining and conversion supported by nuclear capacity growth, constrained supply and fuel-security concerns. Enrichment offers growth potential as western markets reduce reliance on Russia, but planned capacity adds, high capital costs and state-backed competition create uncertainty around returns. Recycling could substantially expand uranium utilization, although conventional pathways appear uneconomic today.

The TD Cowen Insight

As a follow-up to our 2025 report on the new growth cycle of the western nuclear industry, we present a deep dive analysis on supply & demand as well as cost structure across the uranium, conversion, enrichment and recycling steps in the nuclear fuel cycle.

Our Thesis

We see a constructive backdrop for uranium mining and conversion, while we see uncertainty across enrichment and recycling.

What You'll Find in Our Full Research Report

Our cost analysis for uranium covers 97% of global supply, and we see higher prices needed to justify new mine development. Our enrichment analysis aggregates roughly 14 million SWU (separative work units) of expansion plans among U.S. and European companies. This is equivalent to an approximate 60% increase in regional supply, and our cost analysis suggests higher SWU prices may be needed to justify attractive returns.

Finally, we present cost estimates and a sensitivity analysis for various recycling pathways. We also see that recycling fuel from conventional light-water reactors could potentially be cost prohibitive without significantly higher uranium prices. Recycling fast reactor fuel could be viable but requires a fleet of fast reactors.

Financial and Industry Model Implications

Higher mine development costs support our recently upgraded uranium price assumptions as well as correspondingly higher cash flows and valuations for our uranium coverage. Potential new enrichment supply with high and unclear capital costs creates uncertainty around the long-term outlook for returns. Recycling looks challenging today, but if global nuclear capacity is going to achieve aspirations, then fuel availability may become limited creating an obvious economic incentive for recycling.

What To Watch For

We're looking at the price evolution of uranium, conversion and enrichment services. Leading indicators for fuel demand include progress on new nuclear capacity in North America and Europe through uprates, restarts and new-build projects. Also, watch for further refinement of enrichment capacity plans, how much actually gets built, how much is retired and how much backlog enrichment companies have accumulated.