Uranium Price Forecast: Top Trends That Will Impact Uranium in 2024

How did uranium perform in 2023?

Uranium's sizeable price jump in 2023 came as various supply and demand factors converged.

Excess inventory created by the Fukushima incident has finally dried up, and nuclear utilities are ready to sign new long-term contracts with uranium producers. However, material isn't necessarily readily available — many companies cut output or took their mines offline entirely when uranium prices were lower, and restarting production isn't quick.

"The last 18 months or so we've had kind of a flurry of announcements from mining companies signaling that they're going to bring mines back online. And many of these mines have been on care and maintenance since 2018 — some of them even earlier," John Ciampaglia, CEO of Sprott Asset Management, told INN in November.

"That's great, those are the easy pounds to find," he continued. "The hard pounds are the new projects, and that's because you need to raise a lot of capital to fund the financing of the construction. Those construction projects are obviously very complex engineering endeavors, and they obviously take many years to come online."

Where will the uranium spot price go in 2024?

After 2023's move past US$90, speculation is rife about where uranium prices could go in 2024. For many investors, the question is whether the commodity will continue to rise steadily or spike higher like it did in the last cycle.

Mart Wolbert, who goes by @YellowBull11 on X and is the founder of Contrarian Codex, said he's always expected a price spike, but now he thinks it's possible that uranium could make a parabolic move to the upside.

"My expectation was always a robust price move to the upside, steady as she goes, to US$80, US$90, US$95 and then perhaps a blow-off top. Right now I think a parabolic price spike is the right way to look at this, and I think that has blown my base-case scenario — especially after (2023's World Nuclear Association event) — out of the water," he said.

Wolbert noted that it's financial entities like the Sprott Physical Uranium Trust (TSX:U.U) that could create a parabolic move. The trust currently holds 63,161,826 pounds of U3O8 and has a total net asset value of US$5.95 billion.

"If (the Sprott trust sees) a lot more flows again like they did in 2021 and the start of 2022, they will be buying a lot more pounds, and they will be buying a lot more pounds in a physical market that is increasingly getting tighter," he noted, pointing to players like Yellow Cake (LSE:YCA) and PFYN Capital, which are also now looking to snap up uranium.

"You have all these financial entities, as well as a few hedge funds, that are looking to play a part in this market. If they deliver on their potential, or God forbid if they overperform their potential, there will really be a massive price spike," he explained in a conversation with INN. "Because there is simply not enough supply available to really absorb these hundreds of millions — perhaps even billions of dollars — if we really see capital flows coming in."

Justin Huhn, founder and publisher of Uranium Insider, made a similar comment, describing financial players as a "wild card." He also brought up small modular reactors (SMRs), which have about one-third the power-generation capacity as a traditional reactor. They're expected to be a key source of demand in the future, although for now numbers are unclear.

Rozencwajg also sees SMRs a demand-side story to watch further into the future. "I think some of what these (SMR) companies are doing is really revolutionary, and will be critically important going forward. But none of them make the slightest bit of difference to supply and demand dynamics between now and 2030. What you have now is a China reactor buildout story, you have an India reactor hopeful plan and you have Saudi Arabia looking to build reactors as well. And that's all you need — that's what keeps this market really tight until the end of the decade," he noted.

Focusing back on prospects for 2024, Lobo Tiggre, editor and founder of IndependentSpeculator.com, chose uranium as his highest-conviction trade at the beginning of 2023, but has a more muted outlook this coming year.

"With those new pounds coming on, it's hard to say that now is the time for uranium to go vertical again," he told INN. "To be very clear, I'm not bearish, I'm not anti-uranium. I'm not saying it's peaked and it's going over. But I'm saying last year it was easy to say, 'Okay, uranium's got to go up, the price is still too low.' It's no longer still too low. We're at the incentive price now. So it's harder to say it has to go up again. Now, it may ... but it's less of a sure thing than a year ago."

As mentioned, uranium entered 2024 above US$90, trading at levels not seen since 2007.

How to invest in uranium in 2024?

Investors who believe in uranium's upside potential have diverse options when it comes to getting exposure.

Speaking to INN, resource industry veteran Rick Rule, proprietor at Rule Investment Media, suggested that the "easy money" in uranium is now off the table. In his view, it's now time for the "real money" to be made.

"Right now you have to focus on real companies doing real things. Companies like NexGen Energy (TSX:NXE,NYSE:NXE) and Fission Uranium (TSX:FCU,OTCQX:FCUUF) that will be taken over. Companies like Boss Energy (ASX:BOE,OTCQX:BQSSF) that are in production and will enjoy much higher prices than their feasibility studies suggested they would enjoy," Rule said at the New Orleans Investment Conference in November.

Chris Temple, editor and publisher of the National Investor, made a similar comment in a December interview, saying he's interested in the most unleveraged sellers of uranium. "Right now with uranium you want to focus on those that can sell it now, and are going to be exponentially increasing their production — like a Uranium Energy (NYSEAMERICAN:UEC), like an Energy Fuels (TSX:EFR,NYSEAMERICAN:UUUU)," he told INN.

But Temple also reminded investors not to discount the vehicles that are likely to attract generalist investors once their interest in the uranium sector has been piqued — those include the Global X Uranium ETF (ARCA:URA), the Sprott Uranium Miners ETF (ARCA:URNMM) and of course the Sprott Physical Uranium Trust.

It's also possible to take a more speculative approach. As Resource Maven's Preston pointed out, the universe of uranium stocks is small, and a rising price is likely to lift all boats. "If you want to go into the risky end, which is the explorers, you absolutely have the opportunity, the possibility of multiples of the gains that you might get on the producer side. But of course there's the risk. The explorer will move with the market until or unless they either win at a discovery or fail," she said. "If they win you might get huge, huge returns — ridiculous returns — but there's a big 'if' in that."

Investor takeaway

After a stellar performance in 2023, many experts remain bullish on uranium in 2024. While opinions differ on its price trajectory and which stocks to focus on, the broad consensus is that opportunities for investors remain.