Why have uranium prices doubled?

Uranium prices have almost doubled over the last year, but why?

Put simply, it’s a classic case of supply and demand. Demand for uranium has been increasing considerably due to the ongoing energy crisis and an intention to achieve net zero.

Rising prices through demand will encourage investors to support uranium mines, which could deflate the market. Uranium isn’t like a digital business which can be set up immediately though, it takes time.

Whilst there are increasing numbers of countries looking at setting up mines, production is still limited.

Which countries produce uranium?

United States1%

As you can see, uranium mines are often placed in countries regularly involved in geopolitical issues, so not only is there support for boosted production to cut prices, there is also support for diversifying supply chains.

Geopolitics and the rising uranium price

There are currently around 450 nuclear power reactors in operation worldwide. These are currently split across 30 countries with the United States and France having the most.

Nuclear reactors by country (top 10)

Around 50 more are in the process of being built and there is increasing talk of modular reactors which may lead to another large increase in demand.

Russia provides somewhere between 15% and 20% of the USA’s uranium needs. When sanctions were announced on imports from Russia, uranium was an exception. Even without sanctions, the supply from both Russia and Ukraine has been disrupted due to the ongoing conflict.

The combination of supply chain problems and uncertainty around the region have caused prices to rise. You can see this in other commodity prices such as wheat and nickel.

Historically, uranium prices have been incredibly volatile. In 2010, uranium prices hit $70, but after the Fukushima Nuclear Disaster, they declined considerably. The price stayed at around $20 until March 2020 when supply chains were hit hard.

Prices rose to $30, but once again stayed stationary but since August 2021, they have gone up and up. Over the last 12 months, prices for uranium for up 86% in total.

Uranium prices over the last 12 months

If demand continues to remain high and new uranium mines can’t come online, the price will continue to increase.

Demand pushing up uranium prices

Uranium was historically used in photography, smoke detectors and medical instruments. The discovery that it could generate energy was a catalyst that sparked worldwide demand for the commodity.

As well as the increase in nuclear power generation, countries were arming themselves with nuclear weapons which relies on uranium.

It now feels like we’re in another energy transition as we head towards net zero. Countries around the world are looking at ways to reduce reliance on fossil fuels, but the technology on storage of renewable energy is still lagging.

This is leading to an increased emphasis being placed on nuclear power generation, even from countries such as Japan who you might expect to avoid it at all costs. In France, nuclear power accounts for over half of the electricity generated in the country.

Alongside the increased concern for the air we breath, fossil fuel prices have climbed dramatically. One of the biggest complaints about nuclear power is the cost of it, but with fossil fuel prices increasing so much, the cost argument dissipates.

This is leading to increased demand for uranium globally. Countries are looking to support increases in the supply of nuclear power via the old-style reactors or small modular reactors.

Without nuclear energy, achieving net zero by 2050 will be incredibly difficult, so for those countries which have signed up to that pledge, nuclear demand is increasing.

Whilst nuclear power isn’t perfect and there are concerns, a lot of those concerns are being reduced over time, due to fossil fuel prices increasing and increased ability to deal with nuclear waste.

This increase in demand, whether it be short-term or long-term, will push up uranium prices until it is met with an increase in supply.

Supply pushing up uranium prices

According to different estimates, there is an expected supply shortage of around 30 million pounds of uranium. This estimate could prove to be wildly conservative or wildly over the top as it takes into account estimated yields from unproven mines.

This supply chain bottleneck will push uranium prices up, as we have seen with many other goods over the last few years such as second hand cars.

Part of the difficulty with uranium supply is how long it takes to gain approval and to start mining. Mining is an industry not synonymous with environmental wellbeing.

Couple that with people not wanting mines to be opened near them and general levels of opposition to mines by politicians (unless they can get a cut).

This makes it quite challenging to open up new mines that could boost supply. The knock on effect of this is that research into where to mine is also cut back due to the barriers to entry, making the process that much harder overall.

Whilst countries such as Argentina are trying to encourage new mines to open and get started, it still takes time.

Even when a mine is approved and all ready to go, it often takes over a year before extraction and refining can begin. Labour needs to be recruited as well as all the machinery needing to be bought and set up.

Countries and companies will often stockpile uranium to try and deal with volatility in the market. With the ongoing supply chain constraints though, these reserves may end up being depleted, leading to more demand on the open market.

So long as supply is proving timely and difficult to increase, uranium prices will remain high.


Uranium prices are historically incredibly volatile. Because of where mines are located, prices are very sensitive to geopolitical issues.

When you combine ongoing geopolitical issues with increased demand for the product, you have a large increase in uranium prices as we have seen over the last 12 months.

Whilst it is still a challenge to get uranium mines started, and demand for nuclear power remains high, this issue will persist. It could even become worse the longer the geopolitical instability goes on for, as strategic reserves become depleted.

Nuclear power is increasingly being seen as part of the future energy make-up of many countries, but without strategies alongside that, uranium prices will continue to go up and that will cause problems.

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