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The price of nuclear reactor fuel has hit a record high as demand from artificial intelligence data centers deepens market pressure following Russia’s invasion of Ukraine.
According to data provider UxC, enriched uranium prices have reached $190 per unit of separation work – a regular measure of the effort required to separate uranium isotopes – up from $56 three years ago.
The resurgence of interest in nuclear power comes as governments and businesses begin to show their attention to zero-emission energy sources large enough to serve major industrial facilities and communities.
Big Tech firms like Microsoft and Amazon have turn into serious about using the fuel to power the extremely energy-hungry data centers they need to construct as they compete for market share in generative AI.
Increasing competition in the energy sector has heightened industry concerns following Russia’s invasion of Ukraine nearly three years ago. Russia is a serious player in the strategy of turning mined uranium into enriched fuel for a nuclear reactor, but U.S. sanctions and a Russian export ban have helped drive prices to record levels.
“We simply don’t have enough conversion and enrichment in the West and that’s why the price has moved as it has, and the price will only go up,” said Nick Lawson, chief executive of investment group Ocean Wall.
Executives and analysts say the problem is prone to worsen as the U.S. exemption for importers expires at the end of 2027. This pressure has put pressure on the industry to seek out recent plants that may convert uranium into pellets that go into nuclear reactors. . Apart from Russia, the predominant Western countries with operating uranium processing plants are France, the United States and Canada.
“There are a lot of very important policy decisions to be made” about investing in the nuclear and uranium supply chain, Lawson said, adding that constructing recent facilities would take “years” and cost huge sums of cash.
About 27 percent of U.S. enriched uranium imports in 2023 got here from Russia, in accordance with Berenberg analysts. While U.S. utilities likely had enough fuel for this yr, their coverage will decline significantly in 4 years, analysts added.
“To ensure their safety, U.S. utilities will need to begin contracting discussions this year [uranium]especially in the face of restrictions on the import of Russian uranium to the US, which will come into force at the end of 2027,” they said.
Most uranium is sold under long-term contracts rather than on the open or spot market. But spot prices could rise as a result of a potential reduction in the availability of uranium itself, industry analysts say. Kazatomprom, a Kazakh state-owned mine and the world’s largest uranium producer, has warned in recent months of lower-than-expected production.
“We are increasingly seeing that Kazakh material will flow to China and Russia, with less of it going to the West,” which is “a problem for Western utilities,” said Andre Liebenberg, chief executive of London-listed investment company Yellow Cake coping with uranium. “In the medium term, we could easily see a supply collapse precisely because of the lack of new projects that could come online quickly.”
