Uranium price outlook for 2024 according to Citi from Investing.com

Prices have been under pressure recently, trading within a narrow range or slightly lower due to limited trading volume and liquidity.

However, as analysts at Citi Research explained in a note on Monday, this weakness in the uranium price is likely to subside as demand for nuclear energy continues to rise but supply can hardly keep up.

Citi analysts remain tactically optimistic about uranium in the short to medium term and forecast a possible recovery in the price to USD 98/pound later this year.

Citi has revised its uranium price forecasts in response to recent market weakness. Analysts now expect uranium prices to average $94/lb in 2024, with potential upside in the third and fourth quarters.

Looking further ahead, Citi forecasts an average uranium price of $110/pound in 2025, reflecting continued bullish sentiment due to rising demand for nuclear energy.

Uranium production has seen a significant increase of over 10% or 14 million pounds in 2023. This growth is mainly due to the expansion of existing mines, with Kazakhstan playing a key role.

Production in Kazakhstan was revised slightly upwards, with production expected to be 59 million pounds this year as sulphuric acid issues are resolved. In Canada, the Cigar Lake and McArthur River mines are showing improved performance and are likely to reach their production plateau this year.

However, the newly developed McLean Lake mine is expected to contribute only 0.5 million pounds annually.

The pace of uranium mine restarts and new mine development around the world will be key in determining uranium prices. Citi forecasts supply to grow by £17 million in 2024, followed by increases of £14 million in 2025, £12 million in 2026 and more moderate growth in subsequent years.

Cumulative supply growth of 38 million pounds is expected by 2030. However, cumulative global uranium demand is expected to exceed 40 million pounds over the same period. While inventories are likely to balance the market in the short term,

Citi sees a long-term downward trend and expects inventories to fall by 20 million pounds by 2030, underscoring the importance of increasing production.

“The demand outlook for uranium is steadily improving as the need for clean energy and rising electricity consumption over time make nuclear power extremely attractive worldwide,” analysts said.

The need for nuclear energy is becoming increasingly attractive, especially in connection with the growing demand for data centers.

In the US, the rise of AI and data centers is expected to increase total electricity demand by 11% by 2030. Recent record results from the 2025/2026 PJM capacity market auction have exceeded market expectations and indicate strong potential for nuclear energy growth in the US.

Although there are no plans to build new reactors in the United States in the near future, a number of measures are being taken to increase uranium demand, including increasing production, extending operating lives, and restarting decommissioned nuclear power plants.

The restart of nuclear power plants is likely to have the greatest impact on uranium demand in the short term, as three times more uranium is required for the initial filling of nuclear fuel than for regular refueling operations.

In the USA, in addition to the likely restart of the Palisades power plant in the coming years, discussions and preparations are also underway for the possible restart of Three Mile Island 1, Indian Point Units 2 and 3 and Duane Arnold.

Globally, reactors in Taiwan, India and Canada could also potentially be restarted within the next five years, which would further increase demand for uranium.