Uranium Key Features:

Uranium is one of the world’s most important energy minerals because it provides nuclear fuel used to generate electricity in nuclear power stations. Naturally occurring uranium consists of 99% uranium-238 and 1% uranium-235. Uranium-235 is the only naturally occurring fissionable fuel (a fuel that can sustain a chain reaction). Uranium “enriched” into U-235 concentrations is used as fuel for nuclear power plants. Nuclear energy is highly efficient compared to other forms of electricity generation and one of the cleanest energy sources based on CO2 emissions, which makes uranium an important part of the global decarbonisation target and general carbon neutrality.

Key Applications:

  • Nuclear Fuel
  • Nuclear Power Plants
  • Nuclear Submarines

Key Producers:

  • Sinosteel
  • CNNC
  • Sinohydro
  • Jinduicheng Molybdenum
  • JiangXi Copper Corporation
  • Cameco
  • Orano
  • BHP Billiton
  • Kazatomprom
  • APM3
  • ERA
  • AtomRedMetZoloto(ARMZ)
  • Paladin
  • Navoi
  • Rio Tinto Group

Key End Markets:

Uranium is mainly used as fuel in nuclear power reactors for electricity generation. Beyond providing about 14% of the world’s electricity, there are many major other uses of uranium through the production of radio-isotopes. For example, in medicine radio-isotopes are used for diagnosis and research. In the food-processing industry, radio-isotopes are used to sterilize fresh products because irradiation kills parasites, pests and bacteria. Also, radio-isotopes are used for industrial X-ray requirements in the industrial sector. This technique is widely used in metallurgy, automobiles, and aeronautics for inspection of safety and quality. When space probes are required to operate in places far away from the sun, the only available solution for the production of heat and electricity is the use of radio-isotopes for the space industry.

Supply Characteristics:

Reactor-related demand for uranium over the short term is fundamentally determined by installed nuclear capacity, or more specifically by the number of kilowatt-hours of electricity generated in operating Nuclear Power Plants (NPPs) and can be projected with greater certainty. However, both short-term and long-term uranium demand are challenging to project following the accident at the Fukushima Daiichi NPP and the shift towards liberalisation of electricity markets.

According to GlobalData,  global uranium production is expected to recover by 3.1% to reach 51.2kt in 2021, thanks to the return of production at Cigar Lake in Canada and other mines suspended during 2020. Output growth from Kazakhstan (+15.5%) and Russia (+5.2%) will contribute significantly to the overall growth, according to Globaldata, a leading data and analytics company. In contrast, production will continue to decline in Australia (-21.2%) due to the closure of the Ranger mine.

Vinneth Bajaj, Associate Project Manager at GlobalData, comments: “Global uranium production has been limited in recent years, mainly due to a sluggish market. This was further impacted by the COVID-19 pandemic from early 2020. In fact, global production of uranium fell by 9.2% to 49.7kt in 2020. The most significant declines were observed in Canada (43.9%) and Kazakhstan (14.6%) – globally, almost 60% of uranium originates from these two countries.”

Nuclear capacity is expected to rise for the foreseeable future as global energy demand is projected to increase and due to the growing need for a clean energy transition. Annual uranium demand is projected to be largest in the East Asia region. Recognising the security of supply, reliability and predictability that nuclear power offers and promoting incentives for all types of low-carbon technologies, are key conditions for a greater projected growth in nuclear capacity and  uranium demand.

Price Trends

The uranium bubble of 2007 was a period of nearly exponential growth in the price of natural uranium, starting in 2005 and peaking at roughly $300/kg (or ~$135/lb) in the middle of 2007. This coincided with significant rises in the stock price of uranium mining and exploration companies. After mid-2007, the price began to fall again and at the end of 2010, was relatively stable at around $100/kg. The upward trend for the prices of uranium had already been apparent since 2003, prompting increases in mining activity. A possible direct reason for the bubble was the flooding of the Cigar Lake Mine, Saskatchewan, which has the largest undeveloped high-grade uranium ore deposits in the world. This created uncertainty about the short-term future of the uranium supply. Other factors were speculation triggered by growing expectations around India and China's nuclear programs, and a reduction in available weapons-grade uranium. In January 2011, uranium price reached its second significant high of the last 15 years, at around US$ 154/kg or ~US$70/lb. After Fukushima in March 2011, panic selling pushed prices down to US$ 36/kg or ~US$18/lb by November 2016. From 2016 to 2021, the uranium price recovered to the current level of ~US$ 95/kg or ~US$ 48/lb.


According to the Reference Scenario of The Nuclear Fuel Report: Global Scenarios for Demand and Supply Availability 2021-2040, nuclear generation capacity is expected to grow by 2.6% annually, reaching 615 GWe by 2040. The Upper Scenario sees growth to 521 GWe in 2030 and 839 GWe in 2040. As of mid-2021, global nuclear capacity was around 394 GWe (from 442 units), and about 60 GWe (57 units) was under construction.

The pandemic has been a greater disruption to uranium supply than to demand, with nuclear power proving to be very resilient in most markets. Nonetheless, sales from inventories have capped price upside. As inventories diminish, Morgan Stanley expects the uranium price to trend higher. Increased contracting activity in the enrichment market could be the start of a new long-term uranium contracting cycle. While global nuclear power capacity fell -2.7GW in 2020, Morgan Stanley sees a net 8GW increase in 2021 as new plants come online in China, other Asia and Eastern Europe.

In the recent 14th five-year plan, China is targeting 70GW of nuclear capacity by 2025 up from 48GW in 2020. In Europe, an expert panel will recommend that the EU should designate nuclear power as a green investment, which would clearly be a positive for the industry's long-term future. Based on a bottom-up plant model, Morgan Stanley sees nuclear power capacity growing at a 1.7% compound annual growth rate (CAGR) until 2026, followed by a pick-up to a 2.5% CAGR over 2026-30. Reliability, affordability, low-carbon and universal deployability of nuclear energy are key conditions of its larger role in the electricity and energy systems of tomorrow.


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