Uranium market

Since 2018 the sentiment towards nuclear energy has improved in the context of net zero carbon commitments, concerns around concentration of supply and an increased focus on energy security following Russia’s invasion of Ukraine. The U3O8 price has started to respond positively as the supply/demand imbalance has become more widely recognised.

Key demand and supply side drivers
Demand side drivers
  • Long-term growth in global electricity demand
  • Low carbon emission energy source supporting 2050/2060 country emission targets
  • Nuclear’s ability to provide reliable and predictable electricity to complement renewable sources
  • Increased focus on energy security is driving a rethink of energy policies in countries that previously moved away from nuclear
  • Strong growth forecast for nuclear in the large developing economies in Asia
  • Progress in developing small modular reactors (“SMRs”) with reduced capital costs and footprint
  • Increased activity in the spot market from financial intermediaries
  • Contracting by nuclear power utilities for future uranium purchases has started to increase from historically low levels
  • Overhang of secondary supply has largely eroded
  • Growth of data centres and artificial intelligence, which requires greater amounts of reliable electricity
  • Resistance regarding perceived potential environmental and safety impact
Supply side constraints
  • Concentrated resources (three countries produce 68% of the world’s annual uranium production) increase the risk of supply disruptions due to geopolitical events or other factors
  • Producers continue to show discipline at current prices
  • While significant historical resources reached end of life, exploration and development of new resources has been uneconomic during an extended period of depressed uranium prices
  • Cost inflation, supply chain disruptions for essential inputs and industry skills shortages are affecting producers’ ability to increase production, restart idled capacity and develop new resources

Uranium consumption*World Nuclear Association/World Nuclear Power Reactors & Uranium Requirements (May 2023)

Uranium production (2022) *UxC Weekly, 2022 U3O8 Production Review, 15/05/23

The front end of the nuclear fuel cycle covers uranium’s journey from mine to reactor. It is a complex process that can take as long as 18 months *OECD – NEA, The Economics of the Nuclear Fuel cycle (1994). Uranium production, conversion, enrichment and fabrication is concentrated in relatively few locations, while demand for uranium is spread across 31 countries on six continents*World Nuclear Association/World Nuclear Power Reactors & Uranium Requirements (April 2025).

Mining

Uranium is mined using in-situ leaching, open pit and underground mining.

Uranium ore is processed to produce uranium oxide concentrate U3O8.

Conversion

Conversion plants convert physical U3O8 from powder form into natural uranium hexafluoride gas (UF6).

Enrichment

Gaseous uranium (UF6) is enriched, raising the uranium-235 isotope from the natural level of 0.7% to the range of 3.5% to 5% required for use in nuclear reactors.

Fuel fabrication

Enriched UF6 is converted to uranium dioxide powder which is fabricated into fuel rods and then fuel rod bundles. Fuel rod bundles are placed into nuclear reactors owned by utility companies.

Power generation

Heat from nuclear fission produces steam that drives turbines to generate electricity.

  • Uranium enrichment is a sensitive technology from a nuclear non-proliferation standpoint and is tightly controlled. Almost all of the world’s conversion and enrichment capacity is concentrated in China, France, Canada, Russia, the
United Kingdom and the United States*World Nuclear Association, Nuclear Fuel Cycle, Uranium Enrichment.
  • Typically, nuclear power utilities refuel on average around every 18 months*World Nuclear Association, Nuclear Fuel Cycle Overview, holding uranium inventories as working inventory (being enriched, or fabricated into fuel) or strategic inventory (forward requirements held in the event of 
supply disruption).
  • Utilities generally seek to secure most of their uranium requirements directly with producers, converters and enrichers (two to three years in advance and for at least five years of deliveries). Typically around 80% to 85% of utilities’ uranium requirements are secured through these long-term contracts.
  • The balance of their uranium requirements is purchased in the spot market (defined as delivery within a year) which generally trades at a discount to the term contract prices.
  1. Nuclear energy remains a key and growing element of global energy supply on the path to net zero Uranium is primarily used to produce electricity in nuclear power plants, with the world’s energy use forecast to grow by 31% from 2022 to 2050, with most of the increase driven by economic and population growth in developing markets*US Energy Information Administration International Energy Outlook 2023(2024) Reference Case. The energy sector accounts for around three-quarters of current greenhouse gas emissions and this growth will need to be primarily driven by low-carbon energy sources to achieve net-zero emissions by 2050*Net-Zero Roadmap:
    A Global Pathway to keep the 1,5C Goal in reach; IEA (September 2023)    . Nuclear power is an efficient, secure and very low-carbon source of energy, and its reliability and predictability make it an excellent complement to renewable energy that supports grid stability. The International Energy Agency*IEA World Energy Outlook 2024 scenarios forecast that nuclear energy, as one of the largest current sources of low-carbon electricity, will have an integral role to play in the global response to climate change.
  2. National energy policy is shifting in favour of nuclear in some of the biggest consumers of uranium The recent change in sentiment towards nuclear has created a more positive national and regional policy outlook, particularly in the US, across Europe and in China. A more detailed analysis can be found in our 2025 Annual Report.
  3. Power utility long-term contracts need to be replaced Typically, around 80% to 85% of utilities’ uranium requirements are covered by long-term contracts. Since 2013, annual term contracting volumes have averaged around 50% of the average annual uranium requirements of around 170 million lb. At the end of 2023, only around 67% of European*Euratom Supply Agency Annual Report 2023 (2024) and 55% of US*US Energy Information Administration Uranium Marketing Annual Report 2023 (June 2024) utilities’ 2029 uranium requirements were contracted. In the longer-term, UxC estimates that cumulative uncovered requirements to 2040 are about 2.1 billion lb and utilities will have to cover the shortfall in the context of constrained uranium production, declining secondary supplies and a tighter spot market.
  4. Supply side constraints The sources of secondary supply that utilities previously relied on have largely been eroded*UxC Weekly: “The Ero of Inventory Overhang is over”
    5 September 2022     with utilities in the US, Europe and Japan having drawn down their stockpiled material. A significant quantity of U3O8 has been taken off the market by strategic stockpiling by China and India, as well as sequestering by financial entities, including Yellow Cake and Sprott Physical Uranium Trust, which together have acquired more than 70 million lbs from the market since Yellow Cake’s listing in 2018*Sprott Physical Uranium Trust, April 2025..
  5. The impact of Russia’s invasion of Ukraine on the nuclear fuel cycle Russia’s war with Ukraine highlighted the dependency of major Western nuclear utilities on Russian nuclear fuel. While Russia has 8% of the world’s uranium resources and contributes around 5% to global uranium production, it plays a much larger role in the rest of the nuclear fuel cycle with 20% of global conversion capacity utilised and nearly half of all enrichment capacity*MineSpans (February 2025). Governments have started taking steps to incentivise new capacity in the nuclear fuel value chain, but most of these will take at least three to five years to reach scale.
  6. Restrictions on nuclear fuel Sanctions imposed by Western countries on Russia since the start of the war include restrictions and bans on entities and individuals, trade in certain goods and services and freezing of foreign assets. Countries and western utilities took steps to reduce exposure to Russia. In May 2024, President Biden signed into law the Prohibiting Russian Uranium Imports Act, which bans imports of Russian uranium imports into the US from August 2024 to December 2040, although with certain waivers until 2027. In November 2024, the Russian government passed a decree restricting the export of low-enriched uranium to the US*World Nuclear News; “Russia places ‘tit-for-tat’ ban on US uranium exports”; 18 November 2024. More detail can be found in our 2025 Annual Report.