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The price of fuel for nuclear devices has risen to a record high as demand from nuclear power plants has fueled the market following Russia’s invasion of Ukraine.
Prices for enriched uranium have reached $190 for each separated unit – the average amount of effort required to separate uranium isotopes – compared to $56 three years ago, according to data provider UxC.
The resurgence of interest in nuclear power has come as governments and companies look to carbon-free energy sources large enough to serve large industrial and public utilities.
Big Tech companies like Microsoft and Amazon are now interested in using fuel for transportation very powerful data centers they are racing to buildat a moment to compete for market share in the AI that generates.
The rising energy competition has increased the following industry concerns Russia’s invasion of Ukraine about three years ago. Russia is a major player in the process of turning mined uranium into the enriched fuel needed for nuclear reactors, but US sanctions and a Russian import embargo have helped push prices to record highs.
“We don’t have enough change and improvement in the west, that’s why the price has had this kind of migration, and that price will only go up,” said Nick Lawson, the managing director of the financial group of Ocean Wall.
Executives and analysts say the issue is likely to be exacerbated by the expiration of the US tariff on exporters at the end of 2027. That action has put pressure on the industry to find new resources to convert uranium. to pellets going to nuclear power. . Outside of Russia, the main western countries with uranium enrichment facilities are France, the US and Canada.
“There are a lot of important political decisions to be made” about nuclear and uranium enrichment investments, Lawson said, adding that construction of new facilities would take “years” and cost money. a lot.
About 27 percent of U.S. uranium exports in 2023 will come from Russia, according to Berenberg analysts. Although US utilities may have enough fuel for this year, their supply will drop significantly within four years, analysts added.
“The US administration will have to start negotiating a contract this year to save (uranium), especially with the ban on the import of Russian uranium to the US that will be in place at the end of 2027,” they said.
Most uranium is sold under long-term contracts rather than on the open market. But prices for immediate delivery could rise due to the potential exposure of uranium itself, say industry analysts. Kazatomprom, Kazakhstan’s state-owned mine and the world’s largest uranium producer, has warned in recent months of lower-than-expected production.
“We see more and more that Kazakh goods will flow to China and Russia and less will go to the west,” which created “a problem for western services,” said Andre Liebenberg, director of at the head of the London-listed uranium investment vehicle, Yellow Cake. “We could easily see a slowdown in supply in the medium term due to a lack of new projects that can come up quickly.”