Gaius King, Resource Analyst at Fox-Davies explains the supply-demand dynamic of the uranium market, and his personal views on the risks and rewards the investment opportunity presents.
Gaius gave investors a presentation assessing the short-term supply issues affecting the uranium market at our focusIR/London South East Investor Relations webinar, our first live event of the year.
Market data shows that current demand for uranium exceeds supply considerably, with supply meeting just 72% of demand.
In the short term this shortfall in supply is being made up from secondary sources, and Gaius explains in the Q&A what secondary demand is, where it comes from, and how it is finite. Which means new sources of uranium will need to be found.
Nuclear power is attractive because it produces green electricity with base load potential. Citi Bank say they expect uranium prices to average $110 a pound in 2025, others estimate prices may go as high as $150.
However, Gaius King cautions that he expects to see a short-term dip in the bull run before the share price steadies again.
Kazakhstan is the swing producer of mined uranium; Russia is a major producer and processor of uranium so geopolitics will also impact the market price.
