19th Mar 2025
As the world accelerates its shift toward a low-carbon future, nuclear energy is gaining attention as a reliable, scalable, and sustainable energy solution. Data from Global X Funds highlights that uranium-fueled nuclear power contributes approximately 10% of global electricity generation and accounts for 18% of the U.S. electricity supply. With new construction projects and reactor restarts underway globally, uranium investment has become one of the most compelling stories of the decade.
A Surge in Global Nuclear Capacity
Nations across the globe are increasing investments in nuclear power to achieve climate goals, energy security, and industrial stability. The International Energy Agency (IEA) projects global nuclear capacity to grow from approximately 450 GW today to over 650 GW by 2050, driven largely by new reactors in China, India, and Europe.
In China, 24 nuclear reactors are currently under construction, with plans for 44 more in the near future. By 2030, China is expected to become the world’s largest nuclear power generator. Meanwhile, countries like France are investing heavily in nuclear innovation, committing over €300 million to revitalize their nuclear industries.
The United States also aims to triple its nuclear capacity by 2050, a goal supported by the Department of Energy. U.S. policymakers are funding the development of advanced reactor technologies and small modular reactors (SMRs), which promise shorter construction timelines and lower operating costs.
Uranium Demand: A Growing Imbalance
The current uranium market faces a significant supply-demand imbalance. According to Global X Funds, a leading uranium market consultancy, global reactor uranium requirements are expected to reach 190–200 million pounds by 2025, while primary production is likely to fall short by 60–70 million pounds.
This gap is exacerbated by several factors:
- Declining secondary supplies: Stockpiles from decommissioned nuclear weapons and re-enriched materials are diminishing.
- Operational delays: Many uranium mines that were shut down after the 2011 Fukushima disaster have not resumed full production.
- Geopolitical risks: Russia’s war in Ukraine has disrupted uranium enrichment and fuel supply chains, prompting Western nations to diversify their sources.
The spot price of uranium has reflected these constraints, fluctuating between $70 and $100 per pound in 2024. Analysts expect prices to stabilize around $90–$100 per pound in 2025, supported by long-term contracts already being signed at those levels.
Supply Chain Challenges and Regional Shifts
Global X Funds illustrates that Kazakhstan, Canada, and Australia currently dominate uranium production, collectively accounting for over 75% of global output. However, geopolitical developments are reshaping the uranium supply landscape:
- In Canada, Cameco Corporation plans to increase annual production from 18 million to 25 million pounds by 2025.
- In the U.S., the reopening of key facilities, including the Metropolis Works conversion plant, will expand domestic production capabilities.
- China has acquired stakes in Kazakh uranium mines, further cementing its influence on the global supply chain.
The U.S. Energy Information Administration (EIA) reported that American uranium production rose to 82,000 pounds in Q1 2024, outpacing total 2023 production. This resurgence is part of a broader effort to reduce reliance on imports, particularly from Russia, which previously supplied 12% of U.S. uranium needs.
Technological Advancements Supporting Growth
The rise of small modular reactors (SMRs) and next-generation nuclear technologies presents new opportunities for uranium demand. SMRs are particularly suited to remote areas, industrial sites, and data centers, where they can provide consistent, low-carbon energy. The U.S. is currently developing multiple SMR projects, with X-energy’s TRISO-X facility expected to produce advanced reactor fuel by 2025.
Additionally, hybrid energy systems that integrate nuclear and renewable power are gaining traction. These systems optimize grid stability by combining nuclear’s reliability with the flexibility of wind and solar, offering a balanced solution for meeting peak electricity demand.
Outlook and Considerations for Investors
The uranium market is positioned for long-term growth, supported by expanding nuclear capacity, supply constraints, and geopolitical shifts. While price volatility may persist in the short term, the fundamentals point to sustained demand as countries prioritize nuclear energy for decarbonization and energy security.
For investors, uranium offers a unique opportunity to diversify portfolios with exposure to a critical commodity in the global energy transition. ETFs that track uranium mining stocks and physical uranium assets provide a convenient and cost-effective way to access this market.
Stay tuned to learn more about thematic investing opportunities, including insights into energy, commodities, and ETFs, explore.
