Uranium Prices to Bottom Out and Rebound in 2025: What’s Driving the Outlook?

Uranium Prices to Bottom Out and Rebound in 2025: What’s Driving the Outlook?
Published on: Dec 22, 2024

As 2024 comes to an end, uranium spot prices have continued to hit new lows for the year, recently dropping to around $72 per pound, a significant decline from the 17-year high of $106 per pound reached in February. However, John Ciampaglia, CEO of Sprott Asset Management, predicts that uranium prices will rebound to the range of $90–$100 per pound by June 2025.

Sprott Asset Management operates the largest physical uranium investment fund globally, the Sprott Physical Uranium Trust (TSX: U.U, U.UN). In a recent report, the company’s ETF product manager, Jacob White, echoed this positive medium-term outlook, citing increasing geopolitical sensitivities as a key catalyst for uranium’s continued upward movement over time. However, he also noted that short-term volatility is likely to persist.

Why Uranium Prices Are Poised to Rise

Despite the sustained decline in uranium prices throughout 2024, they remain historically high due to global energy crises and renewed emphasis on nuclear energy as a clean energy source. At the same time, uranium supply has struggled to keep pace with rapidly growing demand. Looking ahead, several factors are expected to drive uranium prices upward, including:

  1. Supply Shortages: Limited uranium production continues to constrain the market.
  2. Strategic Importance of Nuclear Energy: Countries are increasingly recognizing nuclear energy as vital for decarbonization.
  3. Energy Policy Under a Trump Presidency: An “America First” energy policy could accelerate domestic uranium production.
  4. Global Nuclear Strategies: New energy agendas are emerging worldwide, further boosting demand for uranium.

AI and Small Modular Reactors Drive Uranium Demand

The rise of artificial intelligence (AI) and its widespread adoption are driving significant energy demand, especially from energy-intensive data centers. Nuclear energy is emerging as the preferred clean energy solution for such high energy needs. For instance:

  • Microsoft signed a 20-year nuclear power purchase agreement with Constellation Energy in September 2024.
  • French nuclear giant Orano is building a new uranium enrichment plant in Tennessee while expanding facilities in France.
  • Urenco, a joint nuclear fuel enterprise from the U.K., Germany, and the Netherlands, is expanding its New Mexico uranium enrichment plant.

Conventional renewable sources such as wind and solar are increasingly insufficient to meet the energy needs of AI data centers, noted Ciampaglia, making nuclear an attractive alternative for tech companies.

U.S. Energy Security Policies Under Trump

Donald Trump’s energy policies are expected to further influence the global uranium market. His administration’s emphasis on “strengthening domestic supply chains” could reshape the nuclear fuel supply chain, with Canada standing to benefit as a major uranium supplier. Canadian mining companies, such as Cameco (TSX: CCO; NYSE: CCJ), have already restarted previously suspended uranium mines and are planning new projects to seize emerging opportunities. In fact, Cameco has turned to the spot market to fulfill its contracts, highlighting the current supply-demand imbalance.

Even prior to the Trump presidency, uranium supply in the U.S. faced challenges. Earlier in 2024, President Joe Biden had signed legislation banning imports of low-enriched uranium from Russia, aiming to reduce reliance on Russian nuclear fuel. The U.S. government has also been investing in domestic uranium projects to stabilize supply.

A Global Nuclear Renaissance

The world’s attitude toward nuclear energy is becoming increasingly positive, supporting the long-term demand for uranium. At the 2023 United Nations Climate Change Conference (COP28), 22 countries pledged to triple global nuclear power capacity by 2050.

Key developments in nuclear energy strategies include:

  1. Japan Reembracing Nuclear Power: As the world’s fourth-largest economy, Japan is revising its energy policy with a goal of nuclear power making up 20% of its energy mix by 2040, up from the current share of 8.5%. Japan’s overall electricity demand is projected to rise by 20% by 2040.
  2. China and India Going Big on Nuclear: China has nuclear projects under construction totaling over 45 gigawatts (GW) in capacity. By 2035, this figure is expected to exceed 70 GW, and by 2060, surpass 200 GW. India plans to increase nuclear capacity to 22,000 megawatts by 2030 and 63,000 megawatts by 2047.
  3. China Taiwan Exploring Nuclear Power: While Taiwan continues its gradual phase-out of nuclear energy, the government has expressed openness to new nuclear technologies to meet rising electricity demand, particularly from AI-related industries.
  4. Southeast Asia’s Rising Interest: Vietnam is updating its National Power Development Plan to include nuclear and hydrogen energy options. The Philippines is considering restarting its dormant Bataan Nuclear Power Plant. South Korea broke ground on two new nuclear power plants in October 2024, while its state-owned utility plans further feasibility studies.

Outlook for 2025 and Beyond

The factors outlined—ranging from AI’s energy demands and geopolitical disruptions to countries’ net-zero goals and nuclear policy shifts—suggest a strong long-term case for uranium demand and higher prices. While near-term uncertainties may create volatility, the resurgence of nuclear energy globally positions uranium as a critical commodity for the future. By mid-2025, a rebound to levels of $90–$100 per pound seems increasingly plausible.

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