Quote from chief_editor on October 11, 2023, 4:30 pm
Uranium is a vital component for the production of nuclear fuel, which is used in nuclear power reactors all over the world (Image: A. Vargas/IAEA).
The global uranium market, which has been in decline for years, is finally seeing a light at the end of the tunnel. Recent signs indicate that the uranium market is about to enter a bullish phase. As enthusiasm for nuclear energy remains strong in many countries around the world, uranium prices have reached a 12-year high, surpassing the $60 per pound mark on September 15. As of press time, although there was a slight decline, the price still hovers around $58 or $59 per pound.
Reaching $60 per pound marks a milestone in the growth of uranium prices. In the past 12 years, due to the nuclear leakage incident at Japan's Fukushima, a global wave of abandoning nuclear energy emerged, leading to a surplus of uranium as miners reduced their capacities. However, in recent years, with the COVID-19 pandemic, Russia-Ukraine conflicts, and the slow global economic recovery, energy security has become a top priority for many countries. Nuclear energy, as a key zero-carbon energy source, is once again becoming favored. Supported by green transitions and climate actions, many countries are advancing their nuclear energy plans, giving the uranium market a fresh start.
According to data from nuclear industry market research and analysis firm UxC, the price of uranium oxide (commonly known as "yellowcake") once reached $65.5 per pound during the week of September 15. This year, uranium has outperformed other metals, with prices rising by 20% so far, with an increase of 12% just between August and September.
The Financial Times pointed out that since 2011, the decline in uranium demand and prices has resulted in a sharp reduction in new uranium mining projects. With public utility companies eager to lock in new purchase contracts, tensions on the supply side have laid the foundation for a rise in uranium prices. Jefferies expects that the number of uranium purchase contracts signed by public utility companies this year will surpass any year since 2012.
Since July, continuous civil unrest in Niger, which has Africa's highest-grade uranium ore and accounts for about 4% of the world's total uranium production, has also pushed up uranium prices. Data from the European Atomic Energy Community shows that in 2022, Niger was the EU's second-largest natural uranium supplier. In September, the Niger Ayr Mining Company's uranium processing plant, controlled by the French state-owned nuclear energy company Orano, stopped operations. The plant's main business is extracting "yellowcake" from uranium ore. Due to a shortage of chemicals needed for uranium processing, the plant had to enter "maintenance mode."
Furthermore, the world's second-largest uranium producer, Canada's Cameco, has faced challenges in the development and production of its two major uranium mines, Cigar Lake and Key Lake, and recently lowered its annual uranium production forecast.
Given the above situation, the uranium market is expected to experience more volatility, further exacerbating concerns over nuclear fuel supply security.
To strengthen their energy supply, the United States, France, South Korea, Belgium, Japan, and others have been re-embracing nuclear energy. They are considering extending the lifespan of existing reactors and mulling over the construction of new nuclear power plants, boosting the demand for uranium.
China's nuclear power construction is also progressing steadily. According to the "14th Five-Year Plan for Modern Energy System", by 2025, China's nuclear power operating capacity will reach around 70 million kilowatts. Currently, China's nuclear power industry chain has formed an annual production capacity of 8 sets of main nuclear power equipment, and the construction and installation capacity can meet the simultaneous construction of 30 nuclear power units.
The World Nuclear Association pointed out that geopolitical conflicts have led to increased interest in nuclear energy. The layout of the nuclear industry promotes the demand for uranium and other nuclear fuels. Due to tight supply, there will be a shortage for a period.
Currently, the United States, Europe, and Asia are all building new reactors. The US "Inflation Reduction Act" encourages public utility companies to extend the operating life of existing reactors. Canada, France, Japan, Russia, and Ukraine, several countries with large reactor fleets, allow existing nuclear power plants to operate for up to 60 years, ensuring safety. The United States allows operations for up to 80 years.
"Concerns about energy security have driven the resurgence of nuclear energy. The days of buying uranium at $40 per pound are over. Prices between $50 and $60 per pound may become the norm, and the market needs more supply," said Grant Isaac, Chief Financial Officer of Cameco.
Pearl Jand, a director of commodity trader WMC Energy, believes that the uranium market supply is very tight. By 2024, prices will continue to rise, and there may be a severe supply crisis in the next few years, with uranium prices potentially soaring to an astonishing $200 per pound.
In the medium term, it's hard to alleviate the supply gap.
The World Nuclear Association recently significantly increased its forecasts for
global nuclear energy demand. It is expected that by 2040, the world's total installed nuclear power capacity will reach about 500 million kilowatts, almost double the current level.
This new trend in the global uranium market may change the fate of many uranium miners who have been in decline for the past decade. The industry now appears to be coming back to life, ushering in a bright new future.
Uranium is a vital component for the production of nuclear fuel, which is used in nuclear power reactors all over the world (Image: A. Vargas/IAEA).
The global uranium market, which has been in decline for years, is finally seeing a light at the end of the tunnel. Recent signs indicate that the uranium market is about to enter a bullish phase. As enthusiasm for nuclear energy remains strong in many countries around the world, uranium prices have reached a 12-year high, surpassing the $60 per pound mark on September 15. As of press time, although there was a slight decline, the price still hovers around $58 or $59 per pound.
Reaching $60 per pound marks a milestone in the growth of uranium prices. In the past 12 years, due to the nuclear leakage incident at Japan's Fukushima, a global wave of abandoning nuclear energy emerged, leading to a surplus of uranium as miners reduced their capacities. However, in recent years, with the COVID-19 pandemic, Russia-Ukraine conflicts, and the slow global economic recovery, energy security has become a top priority for many countries. Nuclear energy, as a key zero-carbon energy source, is once again becoming favored. Supported by green transitions and climate actions, many countries are advancing their nuclear energy plans, giving the uranium market a fresh start.
According to data from nuclear industry market research and analysis firm UxC, the price of uranium oxide (commonly known as "yellowcake") once reached $65.5 per pound during the week of September 15. This year, uranium has outperformed other metals, with prices rising by 20% so far, with an increase of 12% just between August and September.
The Financial Times pointed out that since 2011, the decline in uranium demand and prices has resulted in a sharp reduction in new uranium mining projects. With public utility companies eager to lock in new purchase contracts, tensions on the supply side have laid the foundation for a rise in uranium prices. Jefferies expects that the number of uranium purchase contracts signed by public utility companies this year will surpass any year since 2012.
Since July, continuous civil unrest in Niger, which has Africa's highest-grade uranium ore and accounts for about 4% of the world's total uranium production, has also pushed up uranium prices. Data from the European Atomic Energy Community shows that in 2022, Niger was the EU's second-largest natural uranium supplier. In September, the Niger Ayr Mining Company's uranium processing plant, controlled by the French state-owned nuclear energy company Orano, stopped operations. The plant's main business is extracting "yellowcake" from uranium ore. Due to a shortage of chemicals needed for uranium processing, the plant had to enter "maintenance mode."
Furthermore, the world's second-largest uranium producer, Canada's Cameco, has faced challenges in the development and production of its two major uranium mines, Cigar Lake and Key Lake, and recently lowered its annual uranium production forecast.
Given the above situation, the uranium market is expected to experience more volatility, further exacerbating concerns over nuclear fuel supply security.
To strengthen their energy supply, the United States, France, South Korea, Belgium, Japan, and others have been re-embracing nuclear energy. They are considering extending the lifespan of existing reactors and mulling over the construction of new nuclear power plants, boosting the demand for uranium.
China's nuclear power construction is also progressing steadily. According to the "14th Five-Year Plan for Modern Energy System", by 2025, China's nuclear power operating capacity will reach around 70 million kilowatts. Currently, China's nuclear power industry chain has formed an annual production capacity of 8 sets of main nuclear power equipment, and the construction and installation capacity can meet the simultaneous construction of 30 nuclear power units.
The World Nuclear Association pointed out that geopolitical conflicts have led to increased interest in nuclear energy. The layout of the nuclear industry promotes the demand for uranium and other nuclear fuels. Due to tight supply, there will be a shortage for a period.
Currently, the United States, Europe, and Asia are all building new reactors. The US "Inflation Reduction Act" encourages public utility companies to extend the operating life of existing reactors. Canada, France, Japan, Russia, and Ukraine, several countries with large reactor fleets, allow existing nuclear power plants to operate for up to 60 years, ensuring safety. The United States allows operations for up to 80 years.
"Concerns about energy security have driven the resurgence of nuclear energy. The days of buying uranium at $40 per pound are over. Prices between $50 and $60 per pound may become the norm, and the market needs more supply," said Grant Isaac, Chief Financial Officer of Cameco.
Pearl Jand, a director of commodity trader WMC Energy, believes that the uranium market supply is very tight. By 2024, prices will continue to rise, and there may be a severe supply crisis in the next few years, with uranium prices potentially soaring to an astonishing $200 per pound.
In the medium term, it's hard to alleviate the supply gap.
The World Nuclear Association recently significantly increased its forecasts for
global nuclear energy demand. It is expected that by 2040, the world's total installed nuclear power capacity will reach about 500 million kilowatts, almost double the current level.
This new trend in the global uranium market may change the fate of many uranium miners who have been in decline for the past decade. The industry now appears to be coming back to life, ushering in a bright new future.
