Uranium Prices Explained

Uranium prices surged over $90 per pound after the U.S. and other 20 countries announced to triple their nuclear power generation by 2050. This is due to the varying fossil fuel prices.

China leads the way by building 22 global reactors. Japan restarted its projects to increase nuclear output and Finland has a new reactor, marking Europe’s new facility in 16 years. Thus, these new developments offset the current supply which results in varying uranium prices.

Why are uranium prices fluctuating?

1. Uranium Investment

Uranium prices started their spike after the Toronto-based investment fund, Sprott Asset Management LP began buying millions of uranium pounds for a new trust. 

This prompted other investment firms and country central bank reserves to follow suit. Thus, closing its market price at a solid $48 per pound.

2. Political Turmoil

Incompetent leadership, corruption, political repression, ethnic tension, and economic hardship all fuel violent protests in Kazakhstan, the world’s largest uranium producer accounts for 43% of the total global supply.

This social unrest since 2019 greatly affects uranium production which causes its price hike in the market.

3. Re-opening of Nuclear Plants

The sustainable energy program made other countries re-open their nuclear power plants as nuclear energy is twice more effective than natural gas and coal units and thrice more reliable than wind and solar energy. 

Thus, this furthers the uranium demand and prices as it’s the major fuel for nuclear fission.

4. Geopolitical Tensions

Apart from its electrical energy use, uranium’s by-product isotope is also used for defense.

The current war in Ukraine, the internal conflict in Israel, and the escalating tension in the Red Sea will potentially increase uranium purchases and prompt other countries to re-open their closed nuclear plants to secure their national defense.

Therefore, this also impacts uranium prices in the market.

Which variables impact the price of uranium?

• Uranium Investment
• Political Turmoil
• Re-opening of Nuclear Plants
• Geopolitical Tensions
• Government Policies and Regulations
• Exploration and Development

Where does uranium come from?

Just like any other metal, uranium is a naturally occurring element in the Earth’s crust.

Leeching is the process of uranium extraction. Its process involves mixing powdered ore and a chemical solution to dissolve and purify uranium until it becomes yellowcake, a concentrated form of uranium oxide.

Yellowcake is then converted into uranium hexafluoride, a gas used to enrich the uranium-235 isotope. Additionally, enriched uranium serves as fuel in nuclear power plants and is a component ingredient in nuclear weapons.

The German chemist Martin Heinrich Klaproth discovered uranium in 1789. Furthermore, this discovery opened further scientific research on its properties including radioactivity. Apart from its nuclear energy and weapon use, uranium has a big role in the medicine, science, and geology fields.

Today, this multi-layered metal comes from Kazakhstan with an average yearly total production of 40%. Canada, Australia, Namibia, and Uzbekistan follow closely.

What is the future price of uranium?

As uranium is slowly maintaining its price in the market, experts from the Mineral and Energy Economy Research Institute in Krakow, Poland predict its price value at $107.70 in 2030. Here are the value drivers behind:

1. Government funding for nuclear operations – The surging uranium prices in the market largely stem from government-funded projects that aim to slowly decarbonize their fossil fuel footprint. Additionally, the volatile international relations across big country players in the economy fuel the commodity’s marketability.

2. Stockpiling – Tensions among other countries and the unpredictable dollar movement in the global market make central bank reserves, investors, and companies diversify their online portfolios.

Overall, these predictions heavily rely on the current economic and international security circumstances whose underlying effects will last a couple of years.