The uranium market, like all
commodity market
A commodity market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil. Futures contracts are the oldest way of investin ...
s, has a history of volatility, moving with the standard forces of
supply and demand
In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris paribus, holding all else equal, in a perfect competition, competitive market, the unit price for a ...
as well as
geopolitical
Geopolitics (from Greek γῆ ''gê'' "earth, land" and πολιτική ''politikḗ'' "politics") is the study of the effects of Earth's geography (human and physical) on politics and international relations. While geopolitics usually refers to ...
pressures. It has also evolved particularities of its own in response to the unique nature and use of
uranium
Uranium is a chemical element with the symbol U and atomic number 92. It is a silvery-grey metal in the actinide series of the periodic table. A uranium atom has 92 protons and 92 electrons, of which 6 are valence electrons. Uranium is weak ...
.
Historically, uranium has been mined in countries willing to export, including
Australia
Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
and
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
.
However, countries now responsible for more than 50% of the world’s uranium production include
Kazakhstan
Kazakhstan, officially the Republic of Kazakhstan, is a transcontinental country located mainly in Central Asia and partly in Eastern Europe. It borders Russia to the north and west, China to the east, Kyrgyzstan to the southeast, Uzbeki ...
,
Namibia
Namibia (, ), officially the Republic of Namibia, is a country in Southern Africa. Its western border is the Atlantic Ocean. It shares land borders with Zambia and Angola to the north, Botswana to the east and South Africa to the south and ea ...
,
Niger
)
, official_languages =
, languages_type = National languages[Uzbekistan
Uzbekistan (, ; uz, Ozbekiston, italic=yes / , ; russian: Узбекистан), officially the Republic of Uzbekistan ( uz, Ozbekiston Respublikasi, italic=yes / ; russian: Республика Узбекистан), is a doubly landlocked cou ...](_blank)
.
Uranium from mining is used almost entirely as fuel for
nuclear power plant
A nuclear power plant (NPP) is a thermal power station in which the heat source is a nuclear reactor. As is typical of thermal power stations, heat is used to generate steam that drives a steam turbine connected to a electric generator, generato ...
s. Following the 2011
Fukushima nuclear disaster
The was a nuclear accident in 2011 at the Fukushima Daiichi Nuclear Power Plant in Ōkuma, Fukushima, Japan. The proximate cause of the disaster was the 2011 Tōhoku earthquake and tsunami, which occurred on the afternoon of 11 March 2011 and ...
, the global uranium market remains depressed, with the uranium price falling more than 50%, declining share values, and reduced profitability of uranium producers since March 2011. As a result, uranium companies worldwide have reduced capacity, closed operations and deferred new production.
Before uranium is ready for use as
nuclear fuel
Nuclear fuel is material used in nuclear power stations to produce heat to power turbines. Heat is created when nuclear fuel undergoes nuclear fission.
Most nuclear fuels contain heavy fissile actinide elements that are capable of undergoing ...
in reactors, it must undergo a number of intermediary processing steps that are identified as the front end of the
nuclear fuel cycle
The nuclear fuel cycle, also called nuclear fuel chain, is the progression of nuclear fuel through a series of differing stages. It consists of steps in the ''front end'', which are the preparation of the fuel, steps in the ''service period'' in w ...
:
mining
Mining is the extraction of valuable minerals or other geological materials from the Earth, usually from an ore body, lode, vein, seam, reef, or placer deposit. The exploitation of these deposits for raw material is based on the economic via ...
it (either by
ISL or by mining and milling into
yellowcake
Yellowcake (also called urania) is a type of uranium concentrate powder obtained from leach solutions, in an intermediate step in the processing of uranium ores. It is a step in the processing of uranium after it has been mined but before fue ...
);
enriching it; and finally fuel fabrication to produce fuel assemblies or bundles.
History
The world's top uranium producers in 2017 with 71% of production were
Kazakhstan
Kazakhstan, officially the Republic of Kazakhstan, is a transcontinental country located mainly in Central Asia and partly in Eastern Europe. It borders Russia to the north and west, China to the east, Kyrgyzstan to the southeast, Uzbeki ...
(39% of world production), Canada (22%) and Australia (10%). Other major producers included
Niger
)
, official_languages =
, languages_type = National languages[Namibia
Namibia (, ), officially the Republic of Namibia, is a country in Southern Africa. Its western border is the Atlantic Ocean. It shares land borders with Zambia and Angola to the north, Botswana to the east and South Africa to the south and ea ...](_blank)
and Russia.
Initial treatment facilities to produce uranium oxide are almost always located at the mining sites. The facilities for enrichment, on the other hand, are found in those countries that produce significant amounts of electricity from
nuclear power
Nuclear power is the use of nuclear reactions to produce electricity. Nuclear power can be obtained from nuclear fission, nuclear decay and nuclear fusion reactions. Presently, the vast majority of electricity from nuclear power is produced b ...
. Large commercial enrichment plants are in operation in
France
France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of Overseas France, overseas regions and territories in the Americas and the Atlantic Ocean, Atlantic, Pacific Ocean, Pac ...
,
Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
,
Netherlands
)
, anthem = ( en, "William of Nassau")
, image_map =
, map_caption =
, subdivision_type = Sovereign state
, subdivision_name = Kingdom of the Netherlands
, established_title = Before independence
, established_date = Spanish Netherl ...
,
UK,
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
, and
Russia
Russia (, , ), or the Russian Federation, is a List of transcontinental countries, transcontinental country spanning Eastern Europe and North Asia, Northern Asia. It is the List of countries and dependencies by area, largest country in the ...
, with smaller plants elsewhere.
Global demand for uranium rose steadily from the end of
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
, largely driven by
nuclear weapon
A nuclear weapon is an explosive device that derives its destructive force from nuclear reactions, either fission (fission bomb) or a combination of fission and fusion reactions ( thermonuclear bomb), producing a nuclear explosion. Both bom ...
s procurement programs. This trend lasted until the early 1980s, when changing geopolitical circumstances as well as environmental, safety, economic concerns over nuclear power plants reduced demand somewhat. The production of a series of large
hydro-electric
Hydroelectricity, or hydroelectric power, is electricity generated from hydropower (water power). Hydropower supplies one sixth of the world's electricity, almost 4500 TWh in 2020, which is more than all other renewable sources combined an ...
power stations has also helped to depress the global market since the early 1970s. This phenomenon can be traced back to the construction of the vast
Aswan Dam
The Aswan Dam, or more specifically since the 1960s, the Aswan High Dam, is one of the world's largest embankment dams, which was built across the Nile in Aswan, Egypt, between 1960 and 1970. Its significance largely eclipsed the previous Aswan L ...
in
Egypt
Egypt ( ar, مصر , ), officially the Arab Republic of Egypt, is a transcontinental country spanning the northeast corner of Africa and southwest corner of Asia via a land bridge formed by the Sinai Peninsula. It is bordered by the Mediter ...
. During this time, large uranium inventories accumulated. Until 1985 the Western uranium industry was producing material much faster than nuclear power plants and military programs were consuming it. Uranium prices slid throughout the decade with few respites, leaving the price below $10 per pound for yellowcake by year-end 1989.
As uranium prices fell, producers began curtailing operations or exiting the business entirely, leaving only a few actively involved in uranium mining and causing uranium inventories to shrink significantly. Since 1990 uranium requirements have outstripped uranium production. World uranium requirements have increased steadily to in 2017.
[
Several factors are pushing both industrialized and developing nations towards ]alternative energy
Renewable energy is energy that is collected from renewable resources that are naturally replenished on a Orders of magnitude (time), human timescale. It includes sources such as Solar power, sunlight, wind power, wind, the movement of Hydropo ...
sources. The increasing rate of consumption of fossil fuel
A fossil fuel is a hydrocarbon-containing material formed naturally in the Earth's crust from the remains of dead plants and animals that is extracted and burned as a fuel. The main fossil fuels are coal, oil, and natural gas. Fossil fuels m ...
is a concern for nations lacking in reserves, especially non-OPEC
The Organization of the Petroleum Exporting Countries (OPEC, ) is a cartel of countries. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has, since 1965, been headquart ...
nations. The other issue is the level of pollution
Pollution is the introduction of contaminants into the natural environment that cause adverse change. Pollution can take the form of any substance (solid, liquid, or gas) or energy (such as radioactivity, heat, sound, or light). Pollutants, the ...
produced by coal-burning plants, and despite their vastness, an absence of economical methods for tapping into solar, wind-driven, or tidal reserves. Uranium suppliers hope that this will mean an increase in market share and an increase in volume over the long term due to nuclear power generation.
Uranium prices reached an all-time low in 2001, costing US$7/lb. This was followed by a period of gradual rise, followed by a bubble culminating in mid-2007, which caused the price to peak at around US$137/lb.[
] This was the highest price (adjusted for inflation) in 25 years. The higher price during the bubble has spurred new prospecting and reopening of old mines. In 2012 Kazatomprom and Areva
Areva S.A. is a French multinational group specializing in nuclear power headquartered in Courbevoie, France. Before its 2016 corporate restructuring, Areva was majority-owned by the French state through the French Alternative Energies and Atom ...
were the top two producing companies (with 15% of the production each), followed by Cameco
Cameco Corporation (formerly Canadian Mining and Energy Corporation) is the world's largest publicly traded uranium company, based in Saskatoon, Saskatchewan, Canada. In 2015, it was the world's second largest uranium producer, accounting for 18 ...
(14%), ARMZ Uranium Holding
Atomredmetzoloto, JSC, (ARMZ Uranium Holding Co.), the Mining Division of Rosatom State Atomic Energy Corporation, is a Russian uranium producer internally ranked sixth in the world in terms of uranium production and second in terms of in-situ uran ...
(13%) and Rio Tinto Rio Tinto, meaning "red river", may refer to:
Businesses
* Rio Tinto (corporation), an Anglo-Australian multinational mining and resources corporation
** Rio Tinto Alcan, based in Canada
** Rio Tinto Borax in America
*** Rio Tinto Borax Mine, a ...
(9%).
Following the shutdown of many nuclear power plants after the Fukushima Daiichi nuclear disaster
The was a nuclear accident in 2011 at the Fukushima Daiichi Nuclear Power Plant in Ōkuma, Fukushima, Japan. The proximate cause of the disaster was the 2011 Tōhoku earthquake and tsunami, which occurred on the afternoon of 11 March 2011 and ...
in 2011, demand had fallen to about per year in 2015 with future forecasts uncertain.
Because of the improvements in gas centrifuge
A gas centrifuge is a device that performs isotope separation of gases. A centrifuge relies on the principles of centrifugal force accelerating molecules so that particles of different masses are physically separated in a gradient along the radiu ...
technology in the 2000s, replacing former gaseous diffusion plants, cheaper separative work units have enabled the economic production of more enriched uranium
Enriched uranium is a type of uranium in which the percent composition of uranium-235 (written 235U) has been increased through the process of isotope separation. Naturally occurring uranium is composed of three major isotopes: uranium-238 (238 ...
from a given amount of natural uranium, by re-enriching tails ultimately leaving a depleted uranium
Depleted uranium (DU; also referred to in the past as Q-metal, depletalloy or D-38) is uranium with a lower content of the fissile isotope than natural uranium.: "Depleted uranium possesses only 60% of the radioactivity of natural uranium, hav ...
tail of lower enrichment. This has somewhat lowered the demand for natural uranium.
Market operations
Unlike other metals such as copper or nickel, uranium is not traded on an organized commodity exchange
The New York Mercantile Exchange (NYMEX) is a commodity futures exchange owned and operated by CME Group of Chicago. NYMEX is located at One North End Avenue in Brookfield Place in the Battery Park City section of Manhattan, New York City.
T ...
such as the London Metal Exchange
The London Metal Exchange (LME) is a futures and forwards exchange with the world's largest market in standarised forward contracts, futures contracts and options on base metals. The exchange also offers contracts on ferrous metals and precious ...
. Instead it is traded in most cases through contracts negotiated directly between a buyer and a seller. Recently, however, the New York Mercantile Exchange
The New York Mercantile Exchange (NYMEX) is a commodity futures exchange owned and operated by CME Group of Chicago. NYMEX is located at One North End Avenue in Brookfield Place in the Battery Park City section of Manhattan, New York City.
...
br>announced
a 10-year agreement to provide for the trade of on and off exchange uranium futures contracts.
The structure of uranium supply contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
s varies widely. Pricing can be as simple as a single fixed price, or based on various reference prices with economic corrections built in. Contracts traditionally specify a base price, such as the uranium spot price, and rules for escalation. In base-escalated contracts, the buyer and seller agree on a base price that escalates over time on the basis of an agreed-upon formula, which may take economic indices, such as GDP
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...
or inflation
In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...
factors, into consideration.
A spot market
The spot market or cash market is a public financial market in which financial instruments or commodities are traded for immediate delivery. It contrasts with a futures market, in which delivery is due at a later date. In a spot market, settle ...
contract usually consists of just one delivery and is typically priced at or near the published spot market price at the time of purchase. However 85% of all uranium has been sold under long-term, multi-year contracts with deliveries starting one to three years after the contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
is made. Long-term contract terms range from two to 10 years, but typically run three to five years, with the first delivery occurring within 24 months of contract award. They may also include a clause that allows the buyer to vary the size of each delivery within prescribed limits. For example, delivery quantities may vary from the prescribed annual volume by plus or minus 15%.
One of the peculiarities of the nuclear fuel cycle is the way in which utilities with nuclear power plants buy their fuel. Instead of buying fuel bundles from the fabricator, the usual approach is to purchase uranium in all of these intermediate forms. Typically, a fuel buyer from power utilities will contract separately with suppliers at each step of the process. Sometimes, the fuel buyer may purchase enriched uranium
Enriched uranium is a type of uranium in which the percent composition of uranium-235 (written 235U) has been increased through the process of isotope separation. Naturally occurring uranium is composed of three major isotopes: uranium-238 (238 ...
product, the end product of the first three stages, and contract separately for fabrication, the fourth step to eventually obtain the fuel in a form that can be loaded into the reactor. The utilities believe—rightly or wrongly—that these options offers them the best price and service. They will typically retain two or three suppliers for each stage of the fuel cycle, who compete for their business by tender. Sellers consist of suppliers in each of the four stages as well as brokers and traders. There are fewer than 100 companies that buy and sell uranium in the western world.
In addition to being sold in different forms, uranium markets are differentiated by geography. The global trading of uranium has evolved into two distinct marketplaces shaped by historical and political forces. The first, the western world marketplace comprises the Americas
The Americas, which are sometimes collectively called America, are a landmass comprising the totality of North and South America. The Americas make up most of the land in Earth's Western Hemisphere and comprise the New World.
Along with th ...
, Western Europe
Western Europe is the western region of Europe. The region's countries and territories vary depending on context.
The concept of "the West" appeared in Europe in juxtaposition to "the East" and originally applied to the ancient Mediterranean ...
and Australia. A separate marketplace comprises countries within the former Soviet Union
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...
, or the Commonwealth of Independent States
The Commonwealth of Independent States (CIS) is a regional intergovernmental organization in Eurasia. It was formed following the dissolution of the Soviet Union in 1991. It covers an area of and has an estimated population of 239,796,010. ...
(CIS), Eastern Europe
Eastern Europe is a subregion of the Europe, European continent. As a largely ambiguous term, it has a wide range of geopolitical, geographical, ethnic, cultural, and socio-economic connotations. The vast majority of the region is covered by Russ ...
and China. Most of the fuel requirements for nuclear power plant
A nuclear power plant (NPP) is a thermal power station in which the heat source is a nuclear reactor. As is typical of thermal power stations, heat is used to generate steam that drives a steam turbine connected to a electric generator, generato ...
s in the CIS are supplied from the CIS's own stockpiles. Often producers within the CIS also supply uranium and fuel products to the western world, increasing competition.
Available supply
As of 2015, total identified uranium resources were sufficient for more than a century of supply based on current requirements.
In 1983, physicist Bernard Cohen proposed that the world supply of uranium is effectively inexhaustible, and could therefore be considered a form of renewable energy
Renewable energy is energy that is collected from renewable resources that are naturally replenished on a human timescale. It includes sources such as sunlight, wind, the movement of water, and geothermal heat. Although most renewable energy ...
.[
][
] He noted that fast breeder reactor
A breeder reactor is a nuclear reactor that generates more fissile material than it consumes. Breeder reactors achieve this because their neutron economy is high enough to create more fissile fuel than they use, by irradiation of a fertile mate ...
s, fueled by naturally-replenished uranium extracted from seawater, could supply energy at least as long as the sun's expected remaining lifespan of five billion years. These reactors would use uranium-238
Uranium-238 (238U or U-238) is the most common isotope of uranium found in nature, with a relative abundance of 99%. Unlike uranium-235, it is non-fissile, which means it cannot sustain a chain reaction in a thermal-neutron reactor. However, it ...
, which is more abundant than the uranium-235
Uranium-235 (235U or U-235) is an isotope of uranium making up about 0.72% of natural uranium. Unlike the predominant isotope uranium-238, it is fissile, i.e., it can sustain a nuclear chain reaction. It is the only fissile isotope that exis ...
required by conventional reactors.
See also
*List of countries by uranium production
This contains lists of countries by uranium production. The first two lists are compiled by the World Nuclear Association, and measures uranium production by tonnes mined. The last list is compiled by TradeTech, a consulting company which specializ ...
*List of countries by uranium reserves
Uranium reserves are reserves of recoverable uranium, regardless of isotope, based on a set market price. The list given here is based on ''Uranium 2020: Resources, Production and Demand'', a joint report by the OECD Nuclear Energy Agency and th ...
*Uranium mining
Uranium mining is the process of extraction of uranium ore from the ground. Over 50 thousand tons of uranium were produced in 2019. Kazakhstan, Canada, and Australia were the top three uranium producers, respectively, and together account f ...
*List of uranium mines
Uranium production is carried out in about 13 countries around the world, in 2017 producing a cumulative total of 59,462 tonnes of uranium (tU). The international producers were Kazakhstan (39%), Canada (22%), Australia (10%), Namibia (7.1%), Nig ...
*Used nuclear fuel
Spent nuclear fuel, occasionally called used nuclear fuel, is nuclear fuel that has been irradiated in a nuclear reactor (usually at a nuclear power plant). It is no longer useful in sustaining a nuclear reaction in an ordinary thermal reactor an ...
*Reprocessed uranium
Reprocessed uranium (RepU) is the uranium recovered from nuclear reprocessing, as done commercially in France, the UK and Japan and by nuclear weapons states' military plutonium production programs. This uranium makes up the bulk of the material s ...
*Special nuclear material Special nuclear material (SNM) is a term used by the Nuclear Regulatory Commission of the United States to classify fissile materials. The NRC divides special nuclear material into three main categories, according to the risk and potential for its d ...
*Megatons to Megawatts Program The Megatons to Megawatts Program, also called the United States-Russia Highly Enriched Uranium Purchase Agreement, was an agreement between Russia and the United States. The official name of the program is the "Agreement between the Government of t ...
*Uranium bubble of 2007
The uranium bubble of 2007 was a period of nearly exponential growth in the price of natural uranium, starting in 2005 and peaking at roughly $300/kg (or ~$135/lb) in mid-2007. This coincided with significant rises of stock price of uranium mining ...
*Uranium Participation Corporation
Uranium Participation Corporation (UPC) () is a Toronto-based holding company investing nearly all of its assets in uranium, both in the form of uranium oxide () or uranium hexafluoride (), with the primary investment objective of achieving ca ...
* Depression glass
Depression glass is glassware made in the period 1929–1939, often clear or colored translucent machine-made glassware that was distributed free, or at low cost, in the United States and Canada around the time of the Great Depression. Depress ...
* Uranium tile
Uranium tiles have been used in the ceramics industry for many centuries, as uranium oxide makes an excellent ceramic glaze, and is reasonably abundant. In addition to its medical usage, radium was used in the 1920s and 1930s for making watch, ...
* Peak uranium
Uranium mining is the process of extraction of uranium ore from the ground. Over 50 thousand tons of uranium were produced in 2019. Kazakhstan, Canada, and Australia were the top three uranium producers, respectively, and together account f ...
References
External links
Uranium 101: Markets
Uranium prices from UxC
Uranium prices from TradeTech
{{DEFAULTSORT:Uranium Market
Uranium
Nuclear materials
Commodity markets
Wholesale markets