Uranium Hits 18-Month Low: Supply Glut Weighs On Market
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Uranium futures dipped below $64 per pound in March 2025, marking the lowest level in 18 months as the market grappled with a persistent backdrop of sufficient supply and uncertain demand.
This decline reflects a complex interplay of geopolitical, technological, and economic factors shaping the uranium landscape.
A key driver of the price drop is the new US Presidential administration’s signalled intent to secure economic ties with Russia, raising speculation that Washington may lift current sanctions on the import of Russian nuclear fuel.
Russia holds nearly half of the global uranium conversion and enrichment capacity, making it a critical player in the nuclear supply chain.
The potential easing of sanctions could flood the market with additional supply, further pressuring prices.
This comes against a backdrop of already plentiful yellowcake supply for Western enrichers, many of whom are operating under capacity constraints.
Meanwhile, the market is reevaluating its speculative positions on nuclear power demand for US data centres.
The emergence of more efficient large language models (LLMs) in Europe and China has reduced the anticipated energy needs for AI-driven technologies.
This shift is exemplified by Microsoft’s reported cancellation of leases on new data centres, a move that contrasts sharply with earlier assumptions that tech giants were aggressively expanding their power capacity.
The uranium market is also contending with broader macroeconomic and geopolitical uncertainties.
The Trump administration’s lenient rhetoric toward Russia and the potential for removed sanctions have created a bearish sentiment, while ongoing geopolitical tensions and supply chain risks add layers of complexity.
Additionally, the global push for nuclear energy as a clean power source, particularly for data centres and AI applications, remains a long-term bullish factor, but near-term demand appears subdued.
Analysts are closely watching how these dynamics will unfold.
While UBS has revised its uranium price forecasts downward to $78/lb for 2025 and $80/lb for 2026, the market remains sensitive to shifts in policy, technology, and global energy trends.
The interplay between supply constraints and evolving demand will likely dictate uranium’s trajectory in the coming months.
What’s your take—do you think uranium prices will rebound, or will oversupply and weak demand continue to weigh on the market? 🤔📉
Chart: Trading Economics
