Uranium is used as the fuel in nuclear power plants, the cleanest and most reliable source large-scale generation electrical energy. According to the World Nuclear Association (‘‘WNA’’), as of November 2015, there were 397 nuclear power plants operable in the world. These nuclear reactors require approximately 150 million pounds of uranium annually. In addition, the WNA lists 65 reactors under construction, 165 new plants are being planned and 324 are being proposed.
Uranium is used as a fuel for nuclear power plants that generate electricity. Current worldwide production of uranium falls significantly short of consumption. The worldwide production of uranium fell by 5% to 124.0 million pounds in 2014 from 130.6 million pounds in 2012.
Ux Consulting Company, LLC reported that the gap between production and demand was filled by secondary supplies, such as inventories held by governments, utilities and others in the fuel cycle. These secondary supplies have been satisfying 25-30% of worldwide demand, but as they are depleted, future production will need to rise to meet expected growing demand.
Many analysts have been calling for improved uranium prices over the mid-term from a supply deficit as uranium market fundamentals for supply and demand improve. Uranium demand is expected to increase over the mid-term from an increase of nuclear power generation in China, and to a lesser extent, India, Russia and other countries, including new capacity under construction in Turkey.