The spot cost of uranium has risen by 36% considering that the start of 2020, to a current high of US$34/lb. Rick Rule, President and CEO Sprott US Holdings Inc happens to be uranium that is pushing 2018 and feels the price will increase further. This is partly associated with shorter-term concerns over COVID-19 and supply that is resulting, but also more favourable supply and demand fundamentals and despite a range areas of ongoing uncertainty related to US uranium policy. There is certainly now an industry opinion that the demand photo has enhanced notably in recent years while more supply constraint is place that is taking producers. The spot cost of uranium has risen by 36% considering new data.
This has resulted in a space that is growing annual utility requirements and primary manufacturing, which at present is being filled by drawing down on inventories and other secondary sources of supply. However, recent data from the US Energy Information Administration shows that utility inventories are starting to decline and are usually approaching amounts that could place security of supply at an increased risk.
Demand stays robust
Electricity generated from the world’s nuclear reactors increased for the seventh year that is consecutive 2019 although has fallen in 2020 due to reductions in demand through the pandemic. Nevertheless, there are presently 55 reactors under construction, and the international world Nuclear Association’s Nuclear Fuel Report shows a 26% increase in uranium demand over the next 10 years. A few of the development in reactor figures is tempered by early reactor retirements, plans for reduced reliance on nuclear, or policies that are phase-out other regions, and a trend for increased efficiencies.
This could change however as sentiment towards nuclear power is also increasing. One recent announcement that is significant created by the EU, agreeing that nuclear power must be included as the main solution needed to satisfy the EU’s goal of becoming carbon neutral by 2050. The canadian government that is federal recently highlighted its support for nuclear energy when it stated that affordable, safe nuclear energy is the key to reaching Canada’s climate goals. Germany is also reconsidering its full-scale phase-out that is nuclear the end of 2022.
