September 15, 2024 – China’s increasing reliance on nuclear energy and its potential expansion of its nuclear arsenal are having a profound impact on the global uranium market, according to analysts from Citi. As the country accelerates its push toward nuclear energy, China’s demand for uranium is set to surge in the coming years, positioning it as a key player in the global market.
Rising Uranium Demand
China’s utilities currently require 14.6 kt U (38 million lbs) of uranium in 2024, representing 22% of global uranium demand. By 2030, this figure is projected to rise to 24.6 kt U (64 million lbs), accounting for 28% of global demand. The surge in demand is being driven by China’s aggressive efforts to build out its nuclear energy fleet, which is critical to the nation’s goal of reducing carbon emissions and meeting its energy needs.
Citi analysts also note that this growth is consistent across various scenarios. “Uranium requirements by utilities would increase every single year as the country is actively building its nuclear fleet,” writes Citi. The bank’s base case scenario anticipates cumulative uranium demand from China reaching 250 kt U (650 million lbs) by 2035.
Geopolitical Considerations and Nuclear Expansion
China’s uranium demand may also be fueled by its geopolitical ambitions, particularly in light of its potential plans to expand its nuclear warhead arsenal. With a goal to match the nuclear capabilities of the United States and Russia, China could require an additional 84.6 kt U (220 million lbs) of uranium.
However, despite these rising needs, China’s domestic uranium production remains limited. In 2024, domestic production is estimated at just 1.6 kt U (4 million lbs), leaving China heavily reliant on uranium imports to meet its growing demand.
Uranium Imports and Stockpiling
To offset its modest domestic production, China has built significant uranium stockpiles, which currently stand at approximately 173 kt U (450 million lbs). These reserves have been accumulated largely through imports from Central Asia and Africa. Citi analysts warn that China’s import policies could be destabilizing for the global uranium market, particularly as the country’s share of global demand is expected to rise to 36% by 2040.
As China continues to dominate uranium procurement, this could create volatility in global uranium prices, particularly as Chinese utilities increasingly turn to international markets to secure supply.
Conclusion
China’s growing influence in the uranium market is reshaping the global landscape, with demand projected to increase steadily in the coming years. Both the country’s energy needs and its geopolitical ambitions are driving this trend, raising concerns about the potential impact on global uranium prices and supply chains.
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