As the energy market continues to search for new sources of supply, the prices of uranium have been on a steady climb since the beginning of Q3 2023. Uranium, which is used in the production of electricity in nuclear power plants, was one of the worst performing commodities during Q2 2023, but it has been steadily climbing back up during Q3. As the world works to transition from traditional sources of energy to alternative sources, uranium has become a much sought after commodity and the demand has been driving the prices higher.
To understand the increases in uranium prices, we must look at global events. During the third quarter, countries like India, Russia, and the United States all had an increased focus on investment in nuclear energy. India announced plans to build 12 new nuclear power plants and Russia is investing heavily into the nuclear sector. In the United States, there are plans to invest in the modernization of the country’s existing nuclear capacity. All these developments have been pushing up prices, while at the same time, supply has remained constrained due to slow production from the few countries that are able to produce uranium.
This increased investment is encouraging more countries to explore the potential of nuclear energy, and as a result, uranium prices have seen a continued upwards trend through the third quarter of 2023. At the end of the quarter, the spot price of uranium oxide has increased by more than 25%, and is currently hovering around $45/lb which is close to the highest level seen since 2013.
In conclusion, the increased demand for uranium has pushed the prices higher during Q3 2023, and this trend is likely to continue in the near future as more countries explore the potential of nuclear energy. The new investments in uranium mining, combined with the slow supply, suggest that prices will remain strong going into Q4.