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The main factors that determine the price of uranium are supply and demand, economic and political changes, and the availability of substitutes. Changes in these factors can significantly affect uranium's spot, or forecasted, price. Uranium was historically used in early photography, smoke detectors and medical equipment. Discovery of its radioactive properties is what initially sparked world demand and high prices, because uranium’s importance grew to fuel the nuclear power industry and create nuclear weapons.
The rising price of uranium is mostly the result of increasing demand as countries move to reduce their carbon emissions by switching to nuclear energy. Higher prices trigger investors to fund discoveries of new uranium sources. Several discoveries are often made at the same time, flooding the market with more uranium than demanded. When supply exceeds demand, the price of uranium falls until it reaches an equilibrium point. Most of the world’s supply of uranium comes from Argentina, Australia, Canada, China, Kazakhstan, Namibia, Niger, Russia, Ukraine, the United States and Uzbekistan.
Economic changes and political climates affect the price of uranium, because they can alter future demand. When economies are experiencing a recession or depression, investments and growth are on hold. This causes supply to exceed demand, pushing down prices. Politics also play an important role as countries change their policies toward nuclear energy or weapon creation. If a country decides to invest more into foreign supplies of uranium, it increases the overall demand and prices; on the other hand, if the country invests in discovering more uranium within its own borders, it can increase supply and put pressure on reducing its price.
Development of substitutes can also influence the price of uranium. Even if the current cost of uranium is at a low point, demand can decrease significantly if substitutes are available at even cheaper prices. This is especially prevalent with natural resources, because new supplies can become more difficult to find or be exhausted. Uranium is naturally found in low concentrations of only a few parts per million in soil, rock and water. As resources deplete, prices rise, so it is often better to invest in substitutes when dependent on a natural resource so you can avoid a precarious situation in the future.
The price of uranium constantly fluctuates as new developments in the global economy are reported. It is expected that uranium’s demand will continue to climb as more countries around the world expand their nuclear energy policies to reduce carbon emissions. The U.S. Department of Energy provides the public with uranium prices and quantities within its borders, as well as historical data starting from 1981.