Prices for nuclear fuel have increased to record levels as the event faces a lack of conversion in the Uranium supply chain. After the Russian invasion of Ukraine, there were serious narrow places that influenced the market, Financial Times reports.
The demand for uranium is increasing against the background of the revival of nuclear power, but Russia remains a key player in the process of converting the extracted uranium into fuel for nuclear reactors. Fuel prices for reactors have increased much faster than the untreated uranium: since the beginning of 2022, the cost of the enriched uranium has jumped more than three times, up to $ 176 per unit of division, and the price for uranium hexaftoride increased four times - to $ 68 per kg.
Experts indicate that uranium processing has become the main narrow place in supply. Russia controls 22% of the world's processing capacity and 44% of enrichment capacity, which complicates access to these services for Western companies after sanctions.
Despite the rise in prices, energy companies face a serious problem: insufficient investment in new mines and conversion capacities to meet the growing demand. Companies, such as French Orano and Urenco, have committed themselves to expanding enrichment capacity, but none of them considers the construction of new conversion plants in the West.
This situation is complicated by the caution in investing in large capital without long -term transactions with nuclear power plants. Operators, in turn, are not ready to enter into transactions without deliveries.
"The tension in the Uranium Conversion Market is due to a simple factor - the conversion capacities that operate were preserved," - said Cameco, one of the largest Uranus producers.
Thus, the nuclear fuel market faces serious challenges, and further fluctuations in prices can significantly affect nuclear energy and investment in this industry.
