Uranium Prices Hit 17-Month Low Amid Supply Glut
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Uranium futures have continued their downward trajectory, falling below $65 per pound in February 2025, marking a 17-month low.
This decline is occurring against a backdrop of adequate supply and uncertain demand dynamics in the global uranium market.
A key factor influencing the market is the ongoing restrictions on imports of enriched nuclear fuel from Russia.
Russia has historically been a major player in the global uranium enrichment sector, accounting for approximately 44% of global uranium enrichment services.
These restrictions have effectively reduced the number of yellowcake consumers in the market for mined uranium, contributing to the current price pressure.
The US Senate passed the Prohibiting Russian Uranium Imports Act in May 2024, which bans Russian uranium imports starting from August 13, 2024.
However, the act includes provisions for waivers until January 1, 2028, allowing for a gradual transition away from Russian uranium supplies.
This phased approach is expected to maintain a relatively ample availability of yellowcake in the near term.
Adding to the market dynamics, Russia imposed its own restrictions on enriched uranium exports to the US in November 2024, in a retaliatory move against US sanctions.
This ‘tit-for-tat’ action has further complicated the global uranium trade landscape.
Recent developments in artificial intelligence have also impacted the uranium market.
The emergence of more efficient large language models, particularly China’s DeepSeek technology, has led to a reconsideration of speculative positions on nuclear power demand for US data centres.
DeepSeek reportedly consumes 95% less power than established US counterparts, potentially reducing the urgency for alternative power sources like nuclear energy for data centres.
Furthermore, the uranium market is facing pressure from the ample supply and declining prices of coal, which is affecting the overall pricing dynamics of alternative power sources.
This interplay between different energy commodities is contributing to the downward pressure on uranium prices.
The long-term outlook for uranium remains complex, with factors such as the growing interest in nuclear power for clean energy transitions potentially supporting future demand.
The US government’s allocation of $2.72 billion to support the domestic LEU market, including research and development of High-Assay Low-Enriched Uranium (HALEU), could also influence market dynamics in the coming years.
Source: Trading Economics