Financial analysts are expecting the price of uranium to continue to surge higher, as a supply crisis starts to bite and demand for long-term supply goes up exponentially.
The perceived supply/demand issue is starting to come to life, with governments from South Korea to Saudi Arabia look to build out massive nuclear power capacity.
The price of uranium is likely to end the year up at least 50%, according to analysts who spoke to Reuters this week said.
“The market has been slowly building higher prices as mining costs rise and nuclear generators look to build stocks to guard against increasingly risky supply-side issues,” said SP Angel mining analyst John Meyer.
“We see prices rising year-on-year for next 10-20 years or till the world finds another source for large scale un-interruptible base load power with a low carbon footprint.”
Demand for fueling nuclear reactors is projected at 65,650 tonnes in 2023. The World Nuclear Association forecasts demand will surge by 28% by 2030 and nearly double by 2040 to 130,000 tU.
Where the world secures this supply is still very much in question.
Existing capacity is stretched after years of under investment in new uranium mines.
The 2011 Fukushima meltdown made nuclear energy political poison for some governments, including Germany and Japan – where nuclear fleets were shut down or idled.
However, the sentiment in nuclear has completely flipped – as a fossil fuel energy price crunch hits economies hard and it becomes clearer that renewable energy can’t always carry the promised and desired energy load.
We have seen the price of uranium surge to 12-year highs in September 2023, with spot at around $67/lb.
Analysts said there may be some easing of spot price, however, there is a lot more room to move in the short term.
“There’ll be an eventual easing but certainly not before year-end… uranium should have a good run up ahead,” said Liberum mining equity analyst Ben Davis.
Uranium ETFs have soared in recent weeks, with some up over 50%.
