The uranium market is currently experiencing a surge in prices, with uranium miner Cameco reporting the best prices seen in over a decade. With ceilings of about $125-130/lb and floors at about $70-75/lb in market-related contracts, the market is stronger than ever.
Spot prices, which rose nearly 88% last year and hit a 14-year high in February 2024, are now around $82 per pound. This increase in prices can be attributed to the global clean energy push, as nuclear generation is expected to double by 2050, according to the International Energy Agency.
Despite this demand, Plenisfer Investments estimates that prices must exceed the marginal cost of production by at least 30% to incentivize producers to invest in new projects. The market is therefore expected to remain in deficit over the next decade.
Companies such as Uranium Energy Corp and Ur-Energy are capitalizing on the high demand for uranium by looking for higher prices or running via spot sales. Goldman Sachs Research predicts a 160% increase in global data center power demand by 2030, with nuclear energy companies like Constellation and Vistra expected to benefit from the push for climate-friendly energy generation.
Rising demand from utilities is also helping bridge the gap between term and spot prices, with experts predicting that utilities with low inventory will be forced to buy uranium at higher prices. Overall, the future looks bright for the uranium market, with prices at their highest in years and demand continuing to rise.
