Can Centrus Energy Scale Fast Enough to Meet Surging HALEU Demand?

Core Insights - Centrus Energy (LEU) has successfully delivered 900 kilograms of High-Assay, Low-Enriched Uranium (HALEU) to the U.S. Department of Energy (DOE), completing Phase II of its three-phase contract [1][9] - Centrus Energy is the only source of HALEU enrichment in the Western world, which is crucial for powering existing and advanced reactors to meet the demand for carbon-free electricity [2][4] - The HALEU market is projected to grow significantly, from $0.26 billion in 2025 to $6.2 billion by 2035, highlighting a substantial market opportunity for Centrus Energy [4] Company Developments - Centrus Energy signed a contract with the DOE in 2022 to produce HALEU at its Piketon, OH facility, having delivered a total of 920 kilograms in Phases I and II, and is now moving into Phase III [3][9] - The DOE has extended Centrus Energy's contract through June 30, 2026, with the possibility of up to eight additional years of production based on federal appropriations [3][9] - The company plans to expand its production capacity in Ohio to meet domestic demand for both HALEU and low-enriched uranium [4] Competitive Landscape - Centrus Energy competes with major producers of low-enriched uranium, which are primarily government-owned entities, including Orano (France), Rosatom/TENEX (Russia), Urenco (Netherlands, UK, and Germany), and CNEIC (China) [5] - In the uranium mining sector, Energy Fuels is ramping up production and aims to produce up to 6 million pounds of uranium annually, while Ur Energy operates the Lost Creek project with an annual capacity of 1.2 million pounds [6][7] Market Performance - Centrus Energy shares have increased by 161% this year, significantly outperforming the industry average growth of 9.8% [8]