Uranium Prices Forecast to Reach $100 per Pound by 2026

Uranium prices are expected to reach $100 per pound by 2026, a level not seen since the mid-2000s. Citi attributes this forecast to tight supply due to underinvestment in mining and strengthening demand from China, small modular reactors, and a shift in the fuel cycle. The bank estimates that small modular reactors could account for 20% of total uranium demand by 2040, and expects the trend of overfeeding in the enrichment process to continue, further boosting demand for uranium oxide.

Poland's state-owned energy company, Orlen, has announced a groundbreaking agreement to build the country's first small modular nuclear reactor (SMR) in partnership with Synthos Green Energy. The project, backed by US agencies, will utilize GE Hitachi's BWRX-300 technology, marking a significant milestone in Europe's nuclear landscape [1].

The BWRX-300 SMR, with a power capacity of up to 300 MWh, is a modular design that enables factory assembly, resulting in faster and more cost-effective installation. This technology offers several advantages, including the ability to be installed on or off existing grids and to provide electricity to remote areas. Furthermore, SMRs can serve as a backup power source and potentially revive decommissioned sites such as coal mines [1].

Orlen's CEO, Ireneusz Fąfara, highlighted the project's significance, stating that Poland will host the first BWRX-300 SMR in Europe. The European Commission approved a joint venture between SGE and Orlen, named OSGE, in 2023. This joint venture subsequently signed agreements with American and Canadian corporations to develop SMRs, with two US government agencies providing up to $4 billion in support [1].

Despite the project's progress, Orlen and SGE have faced challenges in agreeing on cooperation terms, particularly regarding control over technology rights. Fąfara noted that negotiations have taken over a year to safeguard Orlen's interests and secure direct access to US SMR technology for their joint venture with Synthos [1].

Preparing the environmental report required for potential SMR construction in Włocławek is expected to take around two years. Meanwhile, other European nations are also exploring the potential of SMRs to diversify their low-carbon baseload options [1].

In the Netherlands, there is growing interest in SMRs as a way to diversify the country's low-carbon baseload options. Datacenter operator Equinix signed a Letter of Intent with ULC-Energy for a power purchase agreement (PPA) of up to 250 MWe from SMRs. ULC-Energy has selected Rolls-Royce SMR as its preferred technology provider and is developing plans to deploy 470 MWe light water SMRs [1].

Research from TNO and NRG PALLAS indicates that SMRs can play a crucial role in the future Dutch energy system, contributing to CO2 reduction from large-scale industrial processes by providing process heat. The study suggests that by 2050, there could be room for 2 to more than 13 SMRs, depending on future industrial activity and heat demand [1].

As uranium prices are expected to reach $100 per pound by 2026, driven by tight supply and strengthening demand from China, SMRs, and a shift in the fuel cycle, the demand for uranium oxide is anticipated to rise [2]. Citi estimates that SMRs could account for 20% of total uranium demand by 2040, further boosting demand for uranium oxide.

References:
[1] https://ioplus.nl/en/posts/poland-will-build-its-first-small-modular-reactor-
[2] Citi