Prices have been under pressure recently, trading slightly lower within a tight range due to limited trading volumes and liquidity.
However, this slump in uranium prices is expected to ease as demand for nuclear energy continues to grow but supply is struggling to keep up, according to a note released Monday by analysts at Citi Research.
Citi analysts maintain a tactically bullish outlook for uranium prices in the short to medium term, predicting prices could recover to $98 a pound later this year.
Citi has adjusted its uranium price forecasts following recent market weakness: analysts now expect uranium prices to average $94/lb in 2024, with upward momentum likely in the third and fourth quarters.
Looking further ahead, Citi forecasts uranium prices to average $110/lb by 2025, reflecting a continuing bull market driven by increasing demand for nuclear energy.
Uranium production is set to increase significantly in 2023, increasing by more than 10%, or 14 million pounds. This growth will be driven primarily by the expansion of existing mines, with Kazakhstan playing a key role.
Kazakhstan’s production has been revised up slightly and is now expected to reach 59 million pounds this year as the sulfuric acid issue is expected to be resolved. In Canada, the Cigar Lake and McArthur River mines are performing better and production is expected to peak this year.
However, the newly developed MacLean Lake mine is only expected to contribute just £500,000 a year.
The pace of uranium mine reopenings and new mine developments globally will be key in determining uranium prices. Citi forecasts supplies to increase by £17 million in 2024, followed by £14 million in 2025 and £12 million in 2026, before more modest increases in the following years.
By 2030, cumulative supplies are expected to reach 38 million pounds. However, cumulative global demand for uranium over the same period is projected to exceed 40 million pounds. While inventories are likely to balance the market in the short term,
City has pointed to a long-term downward trend, predicting a £20 million fall in stock by 2030, and stressed the importance of increasing production.
“Demand for clean energy and growing electricity consumption in the long term is making nuclear energy very attractive globally, leading to a steadily improving outlook for uranium demand,” the analysts said.
The need for nuclear energy is becoming more and more attractive, especially as demand for data centers grows.
In the United States, the rise of AI and data centers is expected to drive an 11% increase in total electricity demand by 2030. The recent record-breaking 2025/2026 PJM Capacity Market Auction results exceeded market expectations, suggesting significant potential for the growth of nuclear energy in the United States.
While the United States has no plans to build any new nuclear reactors in the near future, it is taking several steps to increase demand for uranium, including increasing power output, extending reactor life, and restarting decommissioned nuclear plants.
The restart of nuclear power plants is likely to have the greatest short-term impact on uranium demand, as the initial fuel load requires three times as much uranium as a normal refueling process.
In the United States, the Palisades Nuclear Power Plant is likely to be restarted over the next few years, and discussions and preparations are underway for the possible restart of Three Mile Island Units 1, Indian Point Units 2 and 3, and Duane Arnold.
Globally, nuclear reactors in Taiwan, India and Canada may also be restarted within the next five years, potentially further boosting demand for uranium.
