Oops！Uranium Is Becoming Even More Scarce

Kazatomprom, the world’s largest uranium miner controlled by the sovereign wealth fund of the Kazakhstan government, recently issued a production warning, stating that the company’s output in the next two years is very likely to fall below the target level. In the context of the rebound in demand for nuclear fuel, this warning has increased the supply risk of uranium, thus driving further increases in uranium prices.

Following an 85% increase in 2023, uranium prices have risen by about 16% since the beginning of 2024.

On the 12th of this month, Kazatomprom issued a statement on its official website, saying that due to a shortage of sulfuric acid, the company’s uranium production this year will be lower than expected, and subsequent production plans may also be affected. The company warned that if sulfuric acid supply continues to be restricted this year, it will drag down the construction progress of newly developed mines this year, and the originally planned production in 2025 may also be affected.

Kazakhstan is a major global uranium producer, with confirmed global uranium reserves reaching 700,000 tons, accounting for about 14% of the global reserves, ranking second in the world.

In recent times, market sentiment towards higher uranium prices has been increasing. Analysts at Bank of America stated that the uranium market will usher in its third bull market, while analysts at Citigroup released a report predicting an average uranium price of $101 per pound in 2024 and $110 per pound in 2025.

The supply of uranium is also related to national security. The United States has taken multiple measures to promote uranium development, including:

Funding for high-assay low-enriched uranium (HALEU) research and development: By funding accident-tolerant nuclear fuel, high-assay low-enriched uranium research, and completing HALEU enrichment demonstration projects, the United States supports improving the purity and quality of uranium materials, thereby promoting the development of the uranium industry.

Support for new technology development and commercialization: U.S. national laboratories accelerate the development and commercialization of advanced nuclear technologies, which may include new nuclear reactor technologies or other innovative uranium utilization methods.

Cooperation and international exchanges: In recent years, the United States has actively strengthened cooperation with some major nuclear energy developing countries, involving nuclear power construction, decommissioning, nuclear equipment, nuclear technology applications, nuclear fuel, and joint exports to third countries, among other areas.

The Russia-Ukraine war may have an impact on the uranium market, especially on uranium prices. As Russia is one of the world’s largest uranium-producing countries, its tense geopolitical situation may cause concerns in the market regarding the reliability and stability of supply. Such concerns often lead investors to seek safe-haven assets, which could boost uranium prices.

As one of the world’s largest uranium mining countries, Russia has abundant uranium resources and advanced technology and facilities for mining, enrichment, and processing these resources. Additionally, Russia’s research and innovation investments in the nuclear field give it a technological advantage in the field of high-assay low-enriched uranium, positively impacting its position in the global nuclear energy industry.”