Uranium spot prices almost doubled during 2006, jumping from US$37.50/pound for U3O8 in January to $72/pound in December, according to pricing data collected by the Ux Consulting Company.
The $72/pound figure is ten times the $7.10 price of uranium oxide at the end of 2000, unadjusted for inflation. In constant 2006 dollars, uranium oxide spot prices have risen 8.7 times from their close in 2000.
The price rise is linked to the increased demand for nuclear power generation projects.
According to an update on the uranium market from the World Nuclear Association (WNA) in May 2006, spot prices apply to marginal trading from day to day and in 2005 represented about 34% of supply. Most trade is 3-7 year term contracts with producers selling direct to utilities, but with the price often related to the spot price.
Production from world uranium mines now supplies only about 55% of the requirements of power utilities, according to the WNA, with mine production supplemented principally by ex-military material.
However, world mine production will need to expand significantly in the coming years to meet the growing demand, even with increased efficiencies.
...factors increasing fuel demand are offset by a trend for increased efficiencies, so demand is dampened—over the 20 years from 1970 there was a 25% reduction in uranium demand per kWh output in Europe due to such improvements, which continue.