Uranium Market
   HOME

TheInfoList



OR:

The uranium market, like all commodity markets, has a history of volatility, moving with the standard forces of
supply and demand In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris_paribus#Applications, holding all else equal, the unit price for a particular Good (economics), good ...
as well as geopolitical pressures. It has also evolved particularities of its own in response to the unique nature and use of uranium. Historically, uranium has been mined in countries willing to export, including
Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...
and
Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...
. However, countries now responsible for more than 50% of the world’s uranium production include
Kazakhstan Kazakhstan, officially the Republic of Kazakhstan, is a landlocked country primarily in Central Asia, with a European Kazakhstan, small portion in Eastern Europe. It borders Russia to the Kazakhstan–Russia border, north and west, China to th ...
,
Namibia Namibia, officially the Republic of Namibia, is a country on the west coast of Southern Africa. Its borders include the Atlantic Ocean to the west, Angola and Zambia to the north, Botswana to the east and South Africa to the south; in the no ...
,
Niger Niger, officially the Republic of the Niger, is a landlocked country in West Africa. It is a unitary state Geography of Niger#Political geography, bordered by Libya to the Libya–Niger border, north-east, Chad to the Chad–Niger border, east ...
, and
Uzbekistan , image_flag = Flag of Uzbekistan.svg , image_coat = Emblem of Uzbekistan.svg , symbol_type = Emblem of Uzbekistan, Emblem , national_anthem = "State Anthem of Uzbekistan, State Anthem of the Republ ...
. Uranium from mining is used almost entirely as fuel for
nuclear power plant A nuclear power plant (NPP), also known as a nuclear power station (NPS), nuclear generating station (NGS) or atomic power station (APS) is a thermal power station in which the heat source is a nuclear reactor. As is typical of thermal power st ...
s. Following the 2011 Fukushima nuclear disaster, the global uranium market remains depressed, with the uranium price falling more than 50%, declining share values, and reduced profitability of uranium producers since March 2011. As a result, uranium companies worldwide have reduced capacity, closed operations and deferred new production. Before uranium is ready for use as
nuclear fuel Nuclear fuel refers to any substance, typically fissile material, which is used by nuclear power stations or other atomic nucleus, nuclear devices to generate energy. Oxide fuel For fission reactors, the fuel (typically based on uranium) is ...
in reactors, it must undergo a number of intermediary processing steps that are identified as the front end of the nuclear fuel cycle:
mining Mining is the Resource extraction, extraction of valuable geological materials and minerals from the surface of the Earth. Mining is required to obtain most materials that cannot be grown through agriculture, agricultural processes, or feasib ...
it (either by ISL or by mining and milling into yellowcake); enriching it; and finally fuel fabrication to produce fuel assemblies or bundles.


History

Uranium production is highly concentrated. The world's top uranium producers in 2017, representing 71% of total production, were
Kazakhstan Kazakhstan, officially the Republic of Kazakhstan, is a landlocked country primarily in Central Asia, with a European Kazakhstan, small portion in Eastern Europe. It borders Russia to the Kazakhstan–Russia border, north and west, China to th ...
(39% of world production), Canada (22%) and Australia (10%). Other major producers included
Niger Niger, officially the Republic of the Niger, is a landlocked country in West Africa. It is a unitary state Geography of Niger#Political geography, bordered by Libya to the Libya–Niger border, north-east, Chad to the Chad–Niger border, east ...
,
Namibia Namibia, officially the Republic of Namibia, is a country on the west coast of Southern Africa. Its borders include the Atlantic Ocean to the west, Angola and Zambia to the north, Botswana to the east and South Africa to the south; in the no ...
and Russia. Initial treatment facilities to produce uranium oxide are almost always located at or near the mining sites. The facilities for enrichment, on the other hand, are found in those countries that produce significant amounts of electricity from
nuclear power Nuclear power is the use of nuclear reactions to produce electricity. Nuclear power can be obtained from nuclear fission, nuclear decay and nuclear fusion reactions. Presently, the vast majority of electricity from nuclear power is produced by ...
. Large commercial enrichment plants are in operation in
France France, officially the French Republic, is a country located primarily in Western Europe. Overseas France, Its overseas regions and territories include French Guiana in South America, Saint Pierre and Miquelon in the Atlantic Ocean#North Atlan ...
,
Germany Germany, officially the Federal Republic of Germany, is a country in Central Europe. It lies between the Baltic Sea and the North Sea to the north and the Alps to the south. Its sixteen States of Germany, constituent states have a total popu ...
,
Netherlands , Terminology of the Low Countries, informally Holland, is a country in Northwestern Europe, with Caribbean Netherlands, overseas territories in the Caribbean. It is the largest of the four constituent countries of the Kingdom of the Nether ...
, UK,
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
, and
Russia Russia, or the Russian Federation, is a country spanning Eastern Europe and North Asia. It is the list of countries and dependencies by area, largest country in the world, and extends across Time in Russia, eleven time zones, sharing Borders ...
, with smaller plants elsewhere. Global demand for uranium rose steadily from the end of
World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
, largely driven by
nuclear weapon A nuclear weapon is an explosive device that derives its destructive force from nuclear reactions, either fission (fission or atomic bomb) or a combination of fission and fusion reactions (thermonuclear weapon), producing a nuclear exp ...
s procurement programs. In the 1960s, the United States' Energy Agency banned the use of foreign uranium in American reactors, and the country significantly reduced the price of its uranium exports. This resulted in oversupply of uranium in the rest of the world. In June 1972, the major non-United States uranium producers formed a secret cartel to manipulate the market. The cartel (Societe d'Etudes de Recherches d'Uranium) was composed of Australia, France, South Africa, and Anglo-Australian transnational Rio Tinto Zinc Ltd. The cartel sought to mitigate the impacts of US policy on the market by engaging in bid rigging, price fixing, and market sharing. Westinghouse filed an antitrust lawsuit against cartel members in 1976 and the cartel disbanded. In the 1980s and continuing into the 1990s, uranium demand decreased as fewer nuclear power plants were built. Factors for the decreased demand included the end of the Cold War (which in turn resulted in the increased availability of secondary sources of uranium), the disasters at Chernobyl and Three Mile Island. Another factor was the construction of a series of large hydro-electric power stations has also helped to depress the global market since the early 1970s. This phenomenon can be traced back to the construction of the vast
Aswan Dam The Aswan Dam, or Aswan High Dam, is one of the world's largest embankment dams, which was built across the Nile in Aswan, Egypt, between 1960 and 1970. When it was completed, it was the tallest earthen dam in the world, surpassing the Chatuge D ...
in
Egypt Egypt ( , ), officially the Arab Republic of Egypt, is a country spanning the Northeast Africa, northeast corner of Africa and Western Asia, southwest corner of Asia via the Sinai Peninsula. It is bordered by the Mediterranean Sea to northe ...
. During this time, large uranium inventories accumulated. Until 1985 the Western uranium industry was producing material much faster than nuclear power plants and military programs were consuming it. The spot price for uranium fell, leaving the price below $10 per pound for yellowcake by year-end 1989. With the price of uranium low, investment in uranium mining decreased. The uranium market was a buyers market over the periods 1980 to 1994 and 1998 to 2003. Beginning in 2001, uranium prices rebounded and continued to increase through the uranium bubble of 2007. Factors resulting in this price increase included decreased availability of secondary sources of uranium, a flood at the Cigar Lake Mine in
Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...
, new reactors beginning operations, and the announcements of China's plans to expand its nuclear power generation. During the mid-2007 uranium bubble, the price of uranium peaked at around US$137/lb, the highest price (adjusted for inflation) in 25 years. Uranium demand and prices decreased during the
2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...
. Following the shutdown of many nuclear power plants after the
Fukushima Daiichi nuclear disaster The Fukushima nuclear accident was a major nuclear accident at the Fukushima Daiichi Nuclear Power Plant in Ōkuma, Fukushima, Japan, which began on 11 March 2011. The cause of the accident was the 2011 Tōhoku earthquake and tsunami, which r ...
in 2011, demand fell further to about per year. In 2012 Kazatomprom and Areva were the top two producing companies (with 15% of the production each), followed by Cameco (14%), ARMZ Uranium Holding (13%) and Rio Tinto (9%). World uranium requirements increased steadily to in 2017. Because of the improvements in gas centrifuge technology in the 2000s, replacing former gaseous diffusion plants, cheaper separative work units have enabled the economic production of more enriched uranium from a given amount of natural uranium, by re-enriching tails ultimately leaving a depleted uranium tail of lower enrichment. This has somewhat lowered the demand for natural uranium. Several factors are pushing both industrialized and developing nations to seek alternatives to
fossil fuels A fossil fuel is a flammable carbon compound- or hydrocarbon-containing material formed naturally in the Earth's crust from the buried remains of prehistoric organisms (animals, plants or microplanktons), a process that occurs within geologica ...
. The increasing rate of consumption of fossil fuel is a concern for nations lacking in reserves, especially non-
OPEC The Organization of the Petroleum Exporting Countries (OPEC ) is an organization enabling the co-operation of leading oil-producing and oil-dependent countries in order to collectively influence the global oil market and maximize Profit (eco ...
nations, as is the
pollution Pollution is the introduction of contaminants into the natural environment that cause harm. Pollution can take the form of any substance (solid, liquid, or gas) or energy (such as radioactivity, heat, sound, or light). Pollutants, the component ...
produced by coal and gas-burning power plants. On the other hand, it is still difficult to tap economically into the world's vast solar, wind, and tidal energy reserves. Uranium suppliers hope that these factors will drive an increase in uranium production due to demand for nuclear power generation.


Current market operations

The global uranium market has low levels of market coordination and is characterized by regional blocs that operate relatively independent of each other. The global trading of uranium has evolved into two distinct marketplaces shaped by historical and political forces. The first, the western world marketplace, comprises the
Americas The Americas, sometimes collectively called America, are a landmass comprising the totality of North America and South America.''Webster's New World College Dictionary'', 2010 by Wiley Publishing, Inc., Cleveland, Ohio. When viewed as a sing ...
,
Western Europe Western Europe is the western region of Europe. The region's extent varies depending on context. The concept of "the West" appeared in Europe in juxtaposition to "the East" and originally applied to the Western half of the ancient Mediterranean ...
and Australia. A separate marketplace comprises countries within the former
Soviet Union The Union of Soviet Socialist Republics. (USSR), commonly known as the Soviet Union, was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 until Dissolution of the Soviet ...
, or the
Commonwealth of Independent States The Commonwealth of Independent States (CIS) is a regional organization, regional intergovernmental organization in Eurasia. It was formed following the dissolution of the Soviet Union, dissolution of the Soviet Union in 1991. It covers an ar ...
(CIS),
Eastern Europe Eastern Europe is a subregion of the Europe, European continent. As a largely ambiguous term, it has a wide range of geopolitical, geographical, ethnic, cultural and socio-economic connotations. Its eastern boundary is marked by the Ural Mountain ...
and China. Most of the fuel requirements for nuclear power plants in the CIS are supplied from the CIS's own stockpiles. Often producers within the CIS also supply uranium and fuel products to the western world, increasing competition. The uranium market is not highly institutionalized. As of at least 2023, the uranium market does not have benchmark pricing negotiations nor a producers' marketing cartel. Unlike many other metals, uranium is not traded on an organized commodity exchange such as the London Metal Exchange. Instead it is traded in most cases through contracts negotiated directly between a buyer and a seller. In 2007, however, the New York Mercantile Exchange announced a 10-year agreement to provide for the trade of on and off exchange uranium futures contracts. The structure of uranium supply
contract A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...
s varies widely. Pricing can be as simple as a single fixed price, or based on various reference prices with economic corrections built in. Contracts traditionally specify a base price, such as the uranium spot price, and rules for escalation. In base-escalated contracts, the buyer and seller agree on a base price that escalates over time on the basis of an agreed-upon formula, which may take economic indices, such as GDP or
inflation In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...
factors, into consideration. A spot market contract usually consists of just one delivery and is typically priced at or near the published
spot market The spot market or cash market is a public financial market in which financial instruments or commodities are traded for immediate delivery. It contrasts with a futures market, in which delivery is due at a later date. In a spot market, s ...
price at the time of purchase. However 85% of all uranium has been sold under long-term, multi-year contracts with deliveries starting one to three years after the
contract A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...
is made. Long-term contract terms range from 2–10 years, but they typically run for 3–5 years, with the first delivery due within 24 months of contract award. They may also include a clause that allows the buyer to vary the size of each delivery within prescribed limits. For example, delivery quantities may vary from the prescribed annual volume by 15%. One of the peculiarities of the nuclear fuel cycle is the way in which utilities with
nuclear power plant A nuclear power plant (NPP), also known as a nuclear power station (NPS), nuclear generating station (NGS) or atomic power station (APS) is a thermal power station in which the heat source is a nuclear reactor. As is typical of thermal power st ...
s buy their fuel. Instead of buying fuel bundles from the manufacturer, the usual approach is to purchase uranium in all of these intermediate forms. Typically, a fuel buyer from power utilities will contract separately with suppliers at each step of the process. Sometimes, the fuel buyer may purchase enriched uranium product, the end product of the first three stages, and contract separately for fabrication, the fourth step to eventually obtain the fuel in a form that can be loaded into the reactor. The utilities believe—rightly or wrongly—that these options offer them the best price and service. They will typically retain two or three suppliers for each stage of the fuel cycle, who compete for their business by tender. Sellers consist of suppliers in each of the four stages as well as brokers and traders. There are fewer than 100 companies that buy and sell uranium in the western world. In 2010, China became the world's largest importer of uranium and has continued to be as of at least 2023. China's uranium procurement approach includes investment in foreign mining operations. Chinese investment in Kazakhstan mines have contributed to Kazakhstan's current position as the world's largest exporter of uranium.


Available supply

In 1983, physicist Bernard Cohen proposed that the world supply of uranium is effectively inexhaustible, and could therefore be considered a form of
renewable energy Renewable energy (also called green energy) is energy made from renewable resource, renewable natural resources that are replenished on a human lifetime, human timescale. The most widely used renewable energy types are solar energy, wind pow ...
. He noted that fast breeder reactors, fueled by naturally-replenished uranium extracted from seawater, could supply energy at least as long as the Sun's expected remaining lifespan of five billion years. These reactors would use uranium-238, which is more abundant than the uranium-235 required by conventional reactors. As of 2015, total identified uranium resources were sufficient for more than a century of supply based on current requirements.


See also

* List of countries by uranium production * List of countries by uranium reserves * Uranium mining * List of uranium mines * Used nuclear fuel * Reprocessed uranium * Special nuclear material * Megatons to Megawatts Program * Uranium bubble of 2007 * Uranium Participation Corporation * Depression glass * Uranium tile * Peak uranium


References


External links


Uranium 101: MarketsUranium prices from UxCUranium prices from TradeTech
{{DEFAULTSORT:Uranium Market Uranium Nuclear materials Commodity markets Wholesale markets