Supply & Demand

Transformative tailwinds

Ongoing geopolitical events coupled with the global focus on the climate crisis have created what we believe are transformative tailwinds for the nuclear power industry, from both a demand and supply perspective.

The unrest in Kazakhstan at the outset of 2022 raised concerns about the more than 40% of global uranium supply that originates from Kazakh mines. However, it was the Russian invasion of Ukraine in late-February 2022 that was the most transformative event for our industry.

The war continues to broadly impact our market in 2023 with parts of Ukraine, including the Zaporizhzhia Nuclear Power Plant, remaining under Russian control. We believe these developments have set in motion a geopolitical realignment in energy markets that is highlighting the increasingly important role for nuclear power not just in providing clean energy, but also providing secure and affordable energy.

With the global nuclear industry reliant on Russian supplies for approximately 14% of uranium concentrates, 27% of conversion and 39% of enrichment, the realignment is also highlighting the security of supply risk associated with the growing primary supply gap and shrinking secondary supplies, while increasing the focus on origin of supply.

Uncertain supply

Despite the recent increase in prices across most segments of the fuel cycle, years of underinvestment in new production capacity has shifted risk from producers to utilities. In addition to the decisions many producers, including the lowest-cost producers, have made to preserve long-term value by leaving uranium in the ground or idling capacity, there have been a number of unplanned supply disruptions related to the impact of the COVID-19 pandemic and associated supply chain challenges on uranium mining and processing activities.

In addition, not only are there the transportation risks as a result of geopolitical uncertainty, but the risk of transport disruptions for Class 7 nuclear material continues due to global supply chain challenges.

Uranium is a highly trade-dependent commodity. Adding to security of supply concerns is the role of commercial and state-owned entities in the uranium market, and trade policies that highlight the disconnect between where uranium is produced and where it is consumed. Nearly 80% of primary production is in the hands of state-owned enterprises, over 70% comes from countries that consume little-to-no uranium and nearly 90% of consumption occurs in countries that have little-to-no primary production.

As a result, government-driven trade policies and, more recently, actions taken in response to Russia’s invasion of Ukraine, can be particularly disruptive for the uranium market.

Increasing demand

The world needs safe, clean, reliable electricity. With a growing focus on electrification and decarbonization, the world has embarked on a clean-energy transition.

The benefits of nuclear energy have come clearly into focus with a durability we believe has not been previously seen. This is driven by the accountability created by the net-zero carbon targets being set by countries and companies around the world. These targets are turning attention to a triple challenge:

  • First, is to lift one-third of the global population out of energy poverty by growing clean and reliable baseload electricity.
  • Second, is to replace 85% of the current global electricity grids that run on thermal power with a clean, reliable alternative.
  • And finally, is to grow global power grids by electrifying industries, such as private and commercial transportation, home, and industrial heating, largely powered with thermal energy today.

The energy crisis experienced in some parts of the world has amplified concerns about energy security and highlighted the role of energy policy in balancing three main objectives:

  • providing a clean emissions profile;
  • providing an affordable levelized cost profile; and
  • providing a reliable and secure baseload profile.

The IEA World Energy Outlook predicts a 52% increase in electricity demand from 2020 to 2040, with a 75% increase predicted from 2020 to 2050.

Growth in Electricity Generation


  1990 2000 2021 2030 2040 2050
Source: IEA World Energy Outlook 2022 Stated Policies Scenario
Future estimates       34834 42642 49845
Historic 10092 15441 28334      

There is increasing recognition that nuclear power, with its clean emissions profile, reliable and secure baseload characteristics and low, levelized cost has a key role to play in achieving decarbonization goals.

According to the International Atomic Energy Agency there are currently 439 reactors operating globally and 57 reactors under construction.

Currently Under Construction

  China India

Africa & Middle East

Asia Russia Eastern Europe EU


Source: IAEA
Number of Reactors 21 8 9 7 3 3 2 2 2 1

Supply-Demand: Putting it Together

In the first quarter of 2023, fuel buyers continued contracting to secure their long-term requirements for conversion and enrichment services. Additionally, customers are now returning their focus to the uranium required to feed into those services, as evidenced by higher prices across the fuel cycle and getting closer to replacement-rate contracting. Therefore, we expect there will be continued competition among utilities to secure long-term contracts for uranium products and services with proven producers who demonstrate strong environmental, social and governance (ESG) performance and from assets in geopolitically attractive jurisdictions, on terms that will ensure the availability of reliable supply to satisfy demand.

With the improvements in the market, the new long-term contracts we have put in place, and a pipeline of contracting discussions, we plan to produce 33 million pounds (20.3 million pounds our share) of uranium in 2023 and starting in 2024, 36 million pounds (22.4 million pounds our share).

Our strategy of contracting discipline, operational flexibility, supply discipline, and financial discipline positions us to achieve our vision, of “energizing a clean-air world” and delivering long-term value in a growing market.

Caution about Forward-Looking Information

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