October 30, 2026 | Author: Ben McGregor
The uranium specialist argues that industry cost curves have understated full costs for years and that large inventory drawdowns have masked a structural mine-supply deficit.
Uranium market analysis from Mike Alkin, chief investment officer of Sachem Cove Partners, points to a larger supply gap than many models show. In an October 29, 2026 interview with Triangle Investor host Lucijan Valkovic, Alkin reviewed his recent presentation at the Nuclear Energy Institute International Fuel Seminar. He said the industry cost curve has been wrong for years. Spot uranium traded near $92 per pound on October 30, 2026, up from lows near $17–$18 in 2016. Term prices have been reported near or above $100. Alkin’s firm invests in uranium equities and physical uranium. The views below are his analysis of supply, costs and inventories.
Why does Alkin say the uranium cost curve is wrong?
Alkin presented the same core argument at the NEI seminar in 2018 and 2019. He said the cost curve moved with the uranium price rather than reflecting actual full costs. When prices were high the curve sat high. When prices collapsed the curve moved lower. In 2013 Cigar Lake and McArthur River, the two largest mines, were shown with costs in the $20s and $30s. By 2018 some presentations showed them near $16. Alkin said that did not reflect full costs. Producers began showing cash costs instead of full costs that include sustaining capital and other items needed for long-lived assets. He noted that most western production comes from pure-play uranium companies that require meaningful profit because they have no other metals to offset losses. State-owned producers operate under different incentives. The exception is BHP’s Olympic Dam, which produces uranium as a by-product.
Alkin said the market has not appreciated this bifurcation. A cost curve on long-lived assets that shifts dramatically with the price does not provide a reliable guide to the price needed to keep existing mines running and to bring new supply online. In his view the incentive price sits higher than many published curves have indicated.
How did inventories create the illusion of oversupply?
Alkin walked through 2016 industry forecasts. Looking out ten years, consensus numbers showed a reported surplus of roughly 115 million pounds. That figure mixed primary mine supply with secondary sources. On a pure flows basis—mine production versus reactor consumption—there was already a deficit of about 58 million pounds. Secondary sources included inventory drawdowns and underfeeding at enrichers. Underfeeding is the extra uranium enrichers can extract when they have spare capacity. At the time that secondary supply was estimated at 18–20 million pounds a year. Adding all secondary sources produced the headline surplus. Alkin said the narrative at the time was that prices did not need to rise because a surplus existed. In reality there was a structural deficit from mine supply. Uneconomical production later came offline. Roughly 25 percent of world supply was cut in 2017–2019. That widened the gap. Inventories and underfeeding filled it. Commercial inventories were drawn down by about 290 million pounds from 2017 through 2026, according to Alkin’s figures. Future annual inventory drawdowns are projected to decline to around 8 million pounds. The mobility of those inventories—who owns them and their willingness to sell—was lower than models assumed. Once mobile stocks tighten, the price is set by what comes out of the mine.
What lessons does Alkin draw from the 2007 uranium bull market?
Alkin recalled that uranium prices sat in the high single digits through the late 1980s and 1990s. By 2000 the price was $7–$8. From 2005 to 2007 it climbed into the $50s and then spiked to $137 after the October 2006 flood at Cigar Lake. Commentary at the time described the earlier move from $7 to $40–$50 as a quiet bull market. U.S. inventory levels looked lower then than they do today. The difference was the Megatons to Megawatts program. It supplied about 20 million pounds a year of down-blended Russian weapons material into the U.S. until 2013. Utilities did not need to hold as much inventory because that supply was assured. Today that program is gone. The U.S. still consumes 45–50 million pounds a year. Alkin said current U.S. inventory figures lack that historical context. He noted that history in commodity markets often rhymes even if it does not repeat exactly.
Why have uranium stocks fallen despite stronger fundamentals?
Alkin said uranium equities have seen several large drawdowns since 2018. Earlier ones occurred when prices were still low and uncertainty was high. Today the supply story is unchanged and demand expectations are higher. He attributes recent weakness to several factors that are his opinion. Uranium names were included in AI and data-center baskets as Wall Street created theme exposure. When concerns arose that hyperscalers were shifting from large cash generators to large spenders issuing debt and equity, those baskets came under pressure. Rising interest rates hurt capital-intensive developers. Most uranium companies do not generate free cash flow. Multi-strategy funds that focus on near-term data points and new-build timelines have sold when announcements lag their expectations. Thinly traded stocks then amplify the moves. Alkin said none of these factors change the underlying supply-demand math for the existing reactor fleet. He described the current environment as a confluence of narratives rather than a change in the facts. His firm tests its thesis daily and has not seen the facts change.
What should readers watch next?
The Federal Reserve’s December 9–10, 2026 meeting will influence real yields and capital costs for miners. Utility contracting volumes for 2027–2030 will show whether uncovered requirements begin to be filled at higher term prices. Updates on Kazatomprom’s sulfuric-acid plant and any further production guidance will affect primary supply. U.S. and global inventory surveys, including the next EIA Uranium Marketing Annual Report, will indicate whether drawdowns continue to slow. Progress on new mine development timelines remains critical because greenfield projects take many years. Spot prices near $90–$92 and term prices near $96–$100 will show whether the gap between the two narrows or widens.
This article is for educational purposes only and is not investment advice. It does not recommend buying, selling or holding any security.
Sources
- Interview with Mike Alkin, chief investment officer of Sachem Cove Partners, conducted by Lucijan Valkovic of Triangle Investor, recorded October 29, 2026. Transcript provided. YouTube title: “Uranium’s Cost Curve Is WRONG — Mike Alkin Warns of a Much Bigger Supply Crisis.”
- Uranium spot price data as of October 30, 2026 from multiple market sources including Yellowcake Analytics and others, showing levels near $90–$92 per pound.
- Cameco and industry reports on long-term contract price indicators near $96.50 in recent months.
- U.S. Energy Information Administration, Uranium Marketing Annual Report data on commercial inventories.
