Commodities, Finance, News, Uranium

Uranium fundamentals strongest since early 2000s


As more and more countries turn to nuclear power amid the Russia–Ukraine war, uranium is seemingly enjoying a revival.

This has Boss Energy believing that uranium market fundamentals are the strongest they’ve been since the early 2000s.

“Nuclear power is being recognised as a clean energy source that is needed to meet future global climate change targets,” the company said in its December quarterly.

“Uranium demand in the near term is growing as existing reactor lifetimes are being extended and reactors under threat of shutdown for economic reasons are reprieved. Mid to long term demand continues to increase as new reactor programs are announced.”

Boss is looking to bring Australia’s next uranium mine online in late 2023 with the restart of the Honeymoon project in South Australia. This coincides with the US, Europe and Japan looking to boost or sustain their nuclear capacity.

The Vogtle plant in Georgia, US is expected to start up in 2023, making it the first new US reactor in 30 years, while Sweden, Germany, Poland and France are either expanding their nuclear strategy or extending the life of nuclear plants that were originally scheduled to close.

It was announced in late 2022 that Japan would adopt a new policy promoting greater use of nuclear power to reduce carbon emissions and ensure stable power supply amid global fuel shortages.

This is a significant change from previous anti-nuclear sentiment, which was influenced by the 2011 nuclear disaster at Fukushima.

On the supply side, Boss said while idled uranium mines are restarting and operating mines are moving towards full capacity, increased demand forecasts and reduced secondary supply are making supply deficits as early as 2023 likely.

The incentive costs for new mines have also risen in the wake of heightened inflation.

The uranium price hovered around $US50 per pound (lb) during 2022, which is significantly higher than pre-COVID levels, where the energy commodity averaged below $US30/lb between early 2016 and early 2020.

The Resources & Energy Quarterly: December 2022 expects uranium prices to rise to almost $US60/lb in 2024 but increased global uranium supply is forecast to contain prices long-term.

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