Uranium prices are booming 🚀

Uranium prices have gone through the roofs recently, reaching as high as $106 per pound in March 2024 — more than doubling from $48 a year earlier. Prices have currently settled at $85 per pound.

• This is the highest price level that uranium has had in over a decade.

The big picture: countries around the world are turning to nuclear power for two main reasons – to accelerate the energy transition for fossil fuels and coal, and to make up for growing power needs of trends like Generative AI.

Quick Uranium numbers to help you grasp it:

• Uranium prices topped $106 per pound in March 2024, up nearly 100%.
• Currently, 10% of world's electricity comes from nuclear power, that is enough to power 2 billion homes for a year.
• It is projected that 79,400 tons of uranium will be needed in 2024, or nearly 28% more than what was used in 2020.

Why it matters: Nuclear power's low carbon footprint (12 g CO2/kWh) makes it attractive for decarbonization efforts. But increasingly, power hungry data centers around the world, humming with millions of GPUs. Chat GPT query consumes nearly 10 times more energy than a simple Google Search query.

Driving the news:

• Cameco, a major producer, cut 2024 production forecast by 10% due to mine flooding, which hurts Uranium supply.
• China announced plans to build 20 new reactors, up from previous target of 16, which boosts demand. China has plans for 150 new reactors by 2035.
• U.S. government proposed $2 billion investment in domestic uranium enrichment, with Senate passing a bill recently to offering more support for Nuclear energy development.
• Japan restarting 30 reactors by 2030, aiming for 20% nuclear electricity

Bottomline: Analysts now project uranium demand to outstrip supply by 15% in 2025, potentially pushing prices to $150/lb.

Unrivaled nuclear renaissance: Countries are rapidly expanding nuclear power to meet climate goals and energy security needs, driving uranium demand to new heights.

Yes but challenges remain:

• Supply shortages persist due to mine disruptions and underinvestment
• Geopolitical tensions with Russia, controlling 35% of uranium enrichment
• Environmental concerns and public skepticism about nuclear safety
• High costs and long construction times for new nuclear plants

The bottom line: as the energy transition unfolds, and with AI into the mix, expect continued volatility in this critical market, with prices potentially reaching $200/pound by 2025 according to some analysts.