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Key factors affecting the uranium price outlook

In this article we take a look at some of the key supply and demand considerations affecting the uranium price and its outlook, including the most recent influence of the Russia Ukraine crisis.

Uranium Source: Bloomberg

Uranium price surges in the first weeks of March 2022

The uranium price continues to rally, impacted by consequences of the ongoing war between Russia and the Ukraine.

The below monthly chart of uranium (from 2000 to current) shows the dollar price per pound (LB) of the chemical element which is currently trading at its highest levels since May 2011. While off its highs for the month, the price of uranium has jumped more than 17% in the first 15 days of March 2022.

Uranium price Source: Tradingeconomics.com
Uranium price Source: Tradingeconomics.com

What is uranium used for?

Uranium is primarily used to power nuclear reactors and create electrical energy.

Why is the uranium price rallying at present?

The ongoing war between Russia and the Ukraine looks to disrupt trade of the nuclear element. In addition to possible supply headwinds, there has been a growing societal demand for nuclear power as oil, coal and gas prices elevate and the world looks to diversify away from fossil fuels as a source of energy.

It should be noted that the US, while having banned imports of oil and other energies from Russia, have not yet imposed a ban uranium from the country (as of 15 March 2022).

Which countries use the most uranium?

Ironically it is the US that consumes the most Uranium, followed by China, France then Russia.

The below graphic from Statista.com highlights uranium consumption per metric ton by country.

Uranium consumption Source: Statista.com
Uranium consumption Source: Statista.com

Which country produces the most uranium?

While Ukraine and Russia fall within the top ten uranium producers in the world, it is Russia’s ally Kazakhstan which is by far the largest exporter of the commodity.

The World Nuclear Association has reported that in 2020, Kazakhstan produced around 41% of the global uranium supply. The next largest exporting nations of uranium are Canada and Australia who accounted for roughly 13% and 8% respectively of global supply in 2020.

Which companies are the top producers of uranium?

The below graphic from Statista.com shows the leading uranium producing companies based on production (metric tons) in 2020.

Uranium production Source: Statista.com
Uranium production Source: Statista.com

KazAtomProm, listed on the London Stock Exchanges (LSE) is the largest uranium producing company globally, accounting for 24% of world production in 2020, with its primary operations in Kazakhstan.

Orano and Uranium One each accounted for around 9% of total production in 2020.

Orano, is now a private company, although was previously listed as Areva on the Euronext Stock Exchange, Paris.

Uranium One is wholly owned indirectly by Rosatom, the Russian state-owned nuclear corporation.

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This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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