Despite reaching a yearly low, uranium prices remain elevated due to rising demand, particularly from Japan's commitment to increase its nuclear energy reliance.
As 2024 draws to a close, the uranium spot price hits a year-low but remains elevated compared to over a decade ago. Japan 's push to expand its nuclear energy sector provides a boost to uranium demand. Uranium oxide settled at $77.08 per lb. at the end of November, a 3.6% decrease from the previous month and a 15.38% drop from the end of the previous year. However, it has increased by 18.79% over the past three years, according to the latest report from the $6.
6 billion Sprott Physical Uranium Trust (TSX: U.U for USD; U.UN for CAD) released on Friday. 'Given the growing sensitivity to geopolitical factors, we believe the uranium price will continue to behave in this staircase-like pattern over the intermediate term with short-term bouts of volatility,' Jacob White, Sprott's ETF product manager, stated in the report. The uranium spot price peaked at $106 per lb. at the end of January, a level unseen in 17 years, driven by the gap between increasing demand and limited supply as countries explore cleaner energy alternatives. Uranium has benefited from growing global support for nuclear energy, with many countries committing to triple their nuclear capacity by 2050, as discussed at the UN's COP29 climate change conference in Azerbaijan last month. Japan, the world's fourth-largest economy, aims to increase its nuclear energy usage by 20% by 2040, up from its current 8.5%, according to its revised energy policy released on Tuesday. This renewed interest in nuclear power contrasts sharply with the country's response to the 2011 Fukushima nuclear disaster, after which it halted operations at all of its nuclear plants. Operations resumed four years later. Other renewable energies are projected to account for 40% to 50% of the total energy mix, up from 23% last year, while fossil fuel use is expected to decline to 30% to 40% from 69% by 2040. Japan's power demand is anticipated to rise by 20% by 2040 as electrification is expected to increase
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