Uranium market

The uranium market, like all commodity markets, has a history of volatility, moving not only with the standard forces of supply and demand, but also to whims of geopolitics. It has also evolved particularities of its own in response to the unique nature and use of this material.

Historically, uranium has been mined in countries willing to export, including Australia and Canada. However, countries now responsible for more than 30% of the world’s uranium production include Kazakhstan, Namibia, Niger, and Uzbekistan.

Uranium from mining is used almost entirely as fuel for nuclear power plants. Following the 2011 Fukushima nuclear disaster, 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 are reducing capacity, closing operations and deferring new production.

Before uranium is ready for use as nuclear fuel in reactors, it must undergo a number of intermediary processing steps which are identified as the front end of the nuclear fuel cycle: mining it (either underground or in open pit mines), milling it into yellowcake, enriching it and finally fuel fabrication to produce fuel assemblies or bundles. This technologically complicated and challenging process is simple in comparison to the complexity of the market that has evolved to provide these three services.

The world's top uranium producers in 2012 with 64% of production were Kazakhstan (36.5% of world production), Canada (15.4%) and Australia (12.0%). Other major producers included Niger, Namibia and Russia Purification facilities 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. Large commercial enrichment plants are in operation in France, Germany, Netherlands, UK, United States, and Russia, with smaller plants elsewhere. These nations form the core of the uranium market and influence considerable control over all buyers. The uranium market is a classic seller's market. The uranium cartel, as it became known, was the alliance of the major uranium producing nations. Representatives of these five countries met in Paris, France in February, 1972 to discuss the "orderly marketing" of uranium. Although sounding innocuous, they had, amongst themselves, a monopoly in the uranium market and were deciding to exercise it.

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