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Uranium prices have surged to their highest level in 12 years, underscoring a global nuclear power renaissance as utilities race to lock in fuel supplies.
Prices for the commodity, known as “yellowcake,” have risen about 12% in the past month to $65.50 a pound, surpassing last year’s peak and reaching their highest level since 2011, according to pricing data provider UxC. level.
Governments from Washington to Seoul and Paris are considering building new nuclear power plants as they seek energy independence from Russia’s full-scale invasion of Ukraine, which has sent natural gas prices soaring.
The milestone for uranium prices marks a big step toward reestablishing nuclear power as a key source of carbon-free baseload electricity in the global effort to combat climate change, a role that was undermined by the 2011 Fukushima nuclear disaster in Japan.
“Concerns about energy security conflict with concerns about clean energy,” said Grant Isaac, chief financial officer of Cameco, the world’s second-largest uranium producer.
“The days of paying $40 for uranium are over, and maybe $50 or $60 as well. We’re going to need new supplies,” he added.
The fall in uranium demand and prices following the Fukushima disaster resulted in a lack of new mining projects being developed, setting the stage for the current higher prices.
Niger’s uranium production accounts for about 4% of global uranium production. A coup in Niger has increased upward pressure on uranium mines. Cameco announced in September that it had lowered its full-year production forecast due to challenges at its Cigar Lake mine and Key Lake plant in Canada. . .
Orano, France’s largest state-owned nuclear power company, said last week that shortages of key chemicals were causing planned maintenance at its operations in Niger to be brought forward.
Prices are still some distance from the $73 per pound level before the Fukushima disaster, which left the uranium market oversupplied for more than a decade after Japan and Germany began decommissioning their nuclear fleets.
Per Jander, director at commodities trader WMC Energy, said the “steady rise” in prices was driven mainly by energy utilities rather than investors.
“There will be a crisis in the next few years,” he said. “We are not only back to pre-Fukushima levels, we are surpassing it,” he added, referring to the pace of global nuclear development led by China.
Just last week, international trade body the World Nuclear Association sharply raised its forecast for nuclear power’s contribution to global power generation and uranium demand.
It is estimated that by 2040, more than 140 reactors may be operational for longer than previously thought, and 35 GWh of small modular reactors may be developed, requiring the development of new mines to meet a demand that will double annually to 130,000 tons of uranium requirement.
Russia’s war in Ukraine has shaken the nuclear fuel supply chain, as the aggressor country plays a vital role in converting and enriching uranium.
Nick Lawson, CEO of brokerage Ocean Wall, said, “There has been an imbalance between supply and demand for some time, and now geopolitics has exacerbated this imbalance.” He predicts that uranium spot prices may rise to 100 per pound in 2017. $200. 2025.
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