The price of uranium is poised for explosive growth, modelling undertaken by Wall Street investment firm Goehring & Rozencwajg suggests.

In an analysis presented to clients and the wider investment community, Goehring & Rozencwajg see a scenario where uranium spot prices “could move chaotically to the upside” by the end of 2024.

The paper also suggests the market looks very much like it did in the mid-2000s when uranium spiked to $140/lb+ in short order.

Looking back decades to see what’s coming

The analysis looks back at 4 periods of history in the uranium market – from the 1940s through the big nuclear energy buildouts of the 20th century. 

This includes the boom in uranium mining back in the 1960s – through today’s post-Fukushima era period.

We are now leaving that period, for a new era for the commodity. 

The analysis and modelling undertaken by the firm suggest investors seriously consider the merits of a major spike in prices, well beyond what has been witnessed in 2023 so far. 

The price of uranium is up significantly since mid-2023, with prices not seen in over 15 years. 

“For the first time in history, uranium has slipped into a persistent and widening deficit. We believe the results will be dramatic,” they write in an essay posted to clients.

Japan Nuclear Return 

Based on the return of Japan’s nuclear energy fleet alone, where up to 50 reactors are set to come back online – demand for uranium is set to outstrip supply significantly.

This doesn’t even consider massive builds by the Chinese taking place over the next 10+ years.

“Given the deficit between power generation demand and mine supply, and given that almost all easily mobilized Fukishi-ma-related inventory has been removed from the market.

We calculate that 100% of the excess Fukushima-re-late inventory will have been consumed by the end of 2024,” they said.

Huge uranium deficit playing out

“The cumulative deficit between 2023 and 2030 will likely exceed 250 mm lbs, completely depleting all commercial stockpiles.

Uranium has likely reached a pivotal inflection point that could increase the price by as much as three to four-fold over the next several years.”

The supply situation is starting to turn critical

“The uranium market experienced a deficit of nearly 180 mm lbs between 2020 and 2023. The deficit was met by materially depleting the commercial inventories that had accumulated following Fukushima.

By the end of this year, we expect commercial inventories will be back to 250 mm lbs, covering reactor demand by less than 18 months.

The last time commercial inventories reached these levels was in the mid-2000s when prices spiked to their all-time highs of $145 per pound. We expect the same now,” Goehring and Rozencwajg wrote.

What Next for Uranium?

“For the first time in history, uranium has slipped into a persistent and widening deficit.

From the start of the nuclear age in 1945 until 2019, the uranium industry has gone through four distinct periods.

Each period has been unique in terms of supply and demand, leading
to wild price swings that lasted decades.

The market has now definitively entered its fifth major period, likely defined by persistent severe deficits.”

Read the full note and essay here.

Video: Adam Rozencwajg – Uranium at Inflection Point, Will Get “Completely Out of Hand”