CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Uranium futures price: Will rebound continue amid global scramble for alternative energy sources?

By Fitri Wulandari

Edited by Georgy Istigechev

15:28, 12 October 2022

The Roessing Uranium Mine stands near Arandis, Namibia,
Nuclear power – and uranium – is back in the spotlight as countries scramble to find alternative energy sources – Photo: Christian Ender / Getty Images

After dropping from a peak of nearly $65 a pound in April to below $50, the price of uranium futures has been rebounding in recent weeks as nuclear power plants are back in the spotlight.

The worsening energy crisis in Europe and eye-watering fossil fuel prices have forced many countries to seek alternative energy sources.

Will rising demand for alternative fuels help the uranium futures price to keep its recovery momentum?

What are Uranium futures?

Unlike other commodities such as gold, nickel, and copper, uranium is not traded on formal exchanges. Instead, buyers and sellers negotiate directly and privately to trade the fuel.

However, the Chicago Mercantile Exchange Group (CME) in partnership with nuclear market research company UxC LLC, launched uranium futures contracts in April 2007.

A futures contract is a legal agreement to buy assets at predetermined prices but deliver and pay for them later.

The fuel is either sold under a spot market contract, which usually consists of only one delivery, or under a long-term contract, which typically lasts between two and 10 years. Approximately 85% of all uranium is sold on long-term, multi-year contracts, according to ChemEurope.

A small number of private businesses and organisations, including UxC and Trade Tech also independently monitor the uranium market and develop price indicators.

What is your sentiment on CME?

199.99
Bullish
or
Bearish
Vote to see Traders sentiment!

Uranium futures: Historical performance

According to data from economic data provider TradingEconomics, the uranium futures price steadily declined after hitting an all-time high in May 2007 at $148 a pound.

URANIUM FUTURES 25Y PRICE CHART

The price of the so-called “yellowcake” plummeted following a powerful earthquake in Japan in 2011 that caused a nuclear meltdown at the Fukushima plant. For a decade, the uranium future price sat between $15/pound and $30/pound, having fallen from around $60/pound in May 2011. 

Uranium prices started to climb in the final quarter of 2021, hitting a nine-year high of $48/pound in September. The rally continued into 2022 on supply concerns, touching $65/pound in April – a level not seen since March 2011, according to TradingEconomics price chart. 

Political unrest in Kazakhstan, the world's largest uranium producer, followed by Russia's invasion of Ukraine in February have also fuelled the uranium price rally. 

The interest in an energy transition has also lifted the prospects of uranium demand as countries are shifting from coal, oil, and gas to nuclear power plants to reduce emissions.

Countries are either planning to include nuclear power in their energy mix or reverse their nuclear phase-out plan, as is the case in Japan.

Uranium futures price analysis

The price of uranium futures has dropped to below $50 since hitting a peak of $64.50 in April, touching the lowest price for 2022 at around $46/pound in mid-July. 

Natural Gas

2.16 Price
+1.220% 1D Chg, %
Long position overnight fee -0.0630%
Short position overnight fee 0.0410%
Overnight fee time 21:00 (UTC)
Spread 0.0050

Oil - Crude

78.74 Price
-2.840% 1D Chg, %
Long position overnight fee 0.0511%
Short position overnight fee -0.0731%
Overnight fee time 21:00 (UTC)
Spread 0.040

Silver

29.25 Price
-2.070% 1D Chg, %
Long position overnight fee -0.0202%
Short position overnight fee 0.0120%
Overnight fee time 21:00 (UTC)
Spread 0.050

Oil - Brent

81.89 Price
-2.560% 1D Chg, %
Long position overnight fee 0.0304%
Short position overnight fee -0.0524%
Overnight fee time 21:00 (UTC)
Spread 0.045

The price has fallen on expectations that aggressive monetary tightening by major central banks, such as the US Federal Reserve (Fed) and the ECB, could increase the cost of capital and purchase of aluminium by commodity funds and nuclear energy producers, according to TradingEconomics

Russian attacks on the power grids serving Ukrainian nuclear plants put cooling systems in danger and raised the prospect of a disaster, also hurt sentiment on the uranium market, it added. 

However, potential shortfalls in global supply have offered support to the uranium price.

Australia’s Department of Industry, Science & Resources commented on the global production outlook in its report on 4 October:

“Years of low investment could make it challenging to scale production with demand over the medium-term. Many projects were placed in hiatus or paused during the long run of low prices after 2011 and will require significant time to reopen or finalise. However, progress is picking up.”

The prospects of nuclear deployment have also improved amid sky-high coal and gas prices, it said. 

As of 12 October, uranium futures were trading at $49.50, dropping about 6% in one month, but it has gained 24.7% in one year, based on TradingEconomics data.

Analysts' views and predictions

While refraining from issuing an Uranium futures price forecast, Australia’s Department of Industry, Science & Resources projected the uranium spot price to reach $57.9/pound in 2023 and $59.6/pound in 2024 – up from $51 in 2022 on risks of supply shortfalls.

“Uranium mines typically take a long time to obtain approvals, potentially drawing out any supply shortages over the longer term and creating a baseline for structurally higher prices over the rest of the 2020s,” the government agency said.

TradingEconomics forecast uranium futures to trade at $49.92 by the end of this quarter, rising to $54.09 in 12 months’ time. 

Algorithm-based price forecasting service Wallet Investor viewed uranium futures as an “acceptable” long-term (1-year) investment. 

The service’s uranium futures price forecast for 2022 projected the fuel to trade at $38.629/ pound in December 2022. The website’s uranium futures price forecast for 2025 saw the mineral potentially reaching a price of $44.186 in December 2025.

Wallet Investor did not issue a uranium futures price forecast for 2030.

It should be noted that uranium futures price predictions from analysts and price forecasting services can be incorrect. 

Forecasts should not be used in place of your own research. Before investing, always conduct your own due diligence, and never invest or trade with money you cannot afford to lose.

FAQs

Are uranium futures a good investment?

Whether uranium futures is a suitable investment for you depends on your investing goals and risk profile. You should do your own research and never invest what you cannot afford to lose. Note that past performance does not guarantee future returns. And never trade money you cannot afford to lose.

Will uranium futures go up or down?

TradingEconomics has forecast that the price of uranium futures could possibly rise in the future, crossing the $50/pound mark in one year’s time, while algorithm-based forecaster Wallet Investor has issued a more moderate projection of $44.186 in December 2025. 

Remember that analysts and algorithm-based prediction websites can and do get their forecasts wrong. Always do your own research before making an investment decision. And never invest or trade more than you can afford to lose.

Should I invest in uranium futures?

Whether or not you should invest in uranium futures should depend on your risk tolerance, portfolio size, goals, and your experience in the commodities market. You should do your own due diligence before investing. Remember not to invest or trade more than you can afford to lose.

Markets in this article

CME
CME group
199.99 USD
-0.75 -0.370%
Copper
Copper
4.24801 USD
-0.02543 -0.600%
Gold
Gold
2401.36 USD
-44.85 -1.830%

Related topics

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 630,000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading