Citi Research Analysts Bullish on Uranium Prices in 2024-2025
In a recent note dated Monday, analysts at Citi Research have forecasted a potential price rebound for uranium, with projections indicating a rise to $98/lb later this year. Despite recent market softness, Citi remains tactically bullish on uranium in the near to mid-term, adjusting its price forecasts to an average of $94/lb in 2024 and $110/lb in 2025.
The increase in uranium production by over 10% in 2023 has been driven by the expansion of existing mines, particularly in Kazakhstan. With expected production growth in key mines such as Cigar Lake and McArthur River, alongside the resolution of issues in Kazakh production, uranium supply is projected to rise by 17 million pounds in 2024.
However, despite the growth in supply, global uranium requirements are expected to exceed supply by 2030, highlighting the need for production increases. The demand for clean energy, particularly in the context of rising data center demand, is driving the attractiveness of nuclear energy globally.
In the US, the growth of AI and data centers is set to increase total power demand by 11% by 2030, signaling strong potential for nuclear energy growth. While no new reactors are expected to be built in the US, measures such as plant life extensions and reactor restarts are likely to boost uranium demand in the short term.
Overall, the outlook for uranium prices is positive, with increasing demand for nuclear energy driving bullish sentiment. Investors and stakeholders in the energy sector should keep a close eye on developments in uranium production and demand to capitalize on potential opportunities in the market.