Prices have been under pressure recently, trading within a narrow range and slightly lower due to limited trading volume and liquidity.
However, according to Citi Research analysts in a Monday note, this weakness in uranium prices is expected to ease as demand for nuclear power continues to rise while supply struggles to keep pace.
Analysts at Citi remain tactically bullish on uranium in the short to medium term, with projections pointing to a possible price rebound to $98/lb later this year.
Citi has adjusted its uranium price forecasts in response to recent market weakness. Analysts now expect uranium prices to average $94/lb in 2024, with potential upside momentum during the third and fourth quarters.
Looking further ahead, Citi forecasts uranium prices to average $110/lb by 2025, reflecting continued bullish sentiment driven by increasing demand for nuclear energy.
Uranium production has increased significantly in 2023, by more than 10% or 14 million pounds. This growth is mainly due to the expansion of existing mines, in which Kazakhstan plays a key role.
Kazakh production has been revised up slightly, with production expected to hit 59 million pounds this year, as sulfuric acid issues are expected to be resolved. In Canada, the Cigar Lake and McArthur River mines are showing improved performance and are likely to reach their production plateau this year.
However, the newly developed McLean Lake mine is expected to contribute only £0.5 million per year.
The pace at which uranium mines restart and the development of new mines worldwide will be critical in determining uranium prices. Citi expects supply to grow by £17m in 2024, followed by increases of £14m in 2025, £12m in 2026 and more modest growth in subsequent years.
By 2030, cumulative supply growth is expected to reach £38 million. However, cumulative global uranium requirements are expected to exceed £40 million over the same period. Although inventories are likely to balance the market in the short term,
Citi notes a long-term downward trend, with inventories expected to decline by 20 million pounds by 2030, underscoring the importance of production increases.
“The demand outlook for uranium has steadily improved as the need for clean energy and increased energy consumption over time makes nuclear power extremely attractive globally,” analysts said.
The need for nuclear energy is becoming increasingly attractive, especially in the context of the growing demand for data centers.
In the United States, the rise of AI and data centers is expected to increase total energy demand by 11% by 2030. The PJM capacity market’s recent record-breaking auction results for 2025/2026 have exceeded market expectations, indicating strong potential for nuclear energy growth in the United States. the USA
Although no new reactors are expected to be built in the US in the near future, several measures are being taken to increase uranium demand, including increases, extending plant lifespans and restarting retired nuclear power plants.
The restart of nuclear power plants will likely have the greatest impact on uranium demand in the short term, as fuel loading requires three times more uranium than regular fueling processes.
In the US, in addition to the likely restart of the Palisades plant in the coming years, discussions and preparations are underway for the possible restart of Three Mile Island 1, Indian Point Units 2 and 3, and Duane Arnold.
Globally, reactors in Taiwan, India and Canada could also potentially restart within the next five years, further increasing uranium demand.
