Uranium is finally showing growth after years spent in a low-price environment. It’s a good time to ask yourself, “What was the highest price of uranium?
”
Uranium is an important raw material in the energy sector because it provides fuel for nuclear power generation, which covers 10 percent of global energy needs.
Dynamics of Supply and Demand
The price of uranium is mainly influenced by the dynamics of supply and demand.
Optimistic experts believe that they have reached the bottom of the uranium market cycle and that price increases are supported by attractive supply and demand fundamentals
.
About 10 percent of the world’s energy needs are met by nuclear energy generated by 440 existing reactors. With 62 nuclear reactors in various phases of construction around the world, the nuclear energy sector is the main driver of uranium demand
.
Uranium Trading Dynamics
Before discovering the highest price of uranium, it’s worth looking at how this raw material is traded. To truly understand how prices are set, investors need to know how yellowcake is bought and sold
.
While it is possible to trade uranium futures on NYMEX or through the CME Group, investors cannot actually take possession of the metal like they can with precious metals. The obvious reason is that uranium is highly radioactive; therefore, there are international laws that govern all aspects of the uranium supply chain, from the way it is extracted and refined to the way it is transported and stored, as well as the way it changes ownership in the market
.
What was the highest price of uranium?
The price of uranium peaked at US$136.22 in early June 2007, an impressive increase after starting at US$72 at the beginning of the year.
The maximum price of uranium is a long way from where it was at the dawn of the 21st century, trading at a low of US$7. The raw material began its upward trend in 2003, when nuclear energy took on a greater role in satisfying global energy demand, especially in China and India
.
Part of the massive price increase was caused on the supply side — Cameco’s massive Cigar Lake mine in Saskatchewan was flooded in 2006, delaying the start of production for several years. At the time, it was one of the largest undeveloped uranium deposits in the world, and the unexpected delay had a serious impact on the market and contributed to the exponential growth in prices
in 2007.
Conclusion
We answered the question, “What was the highest price of uranium? ” But it remains to be seen if uranium will continue its rebound. The main factors to observe continue to be the growth in the number of nuclear reactors online and under construction, in addition to the decrease in the mineral supply
.
For more information on entering the uranium market, click here to read our overview of uranium stocks, ETFs, and futures.
