A beginner’s guide to uranium: Price, uses & market overview

Explore a thorough overview of the uranium market, learn how it works in simple terms and get to grips with its significance as a popular global commodity.
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Updated: Nov 23, 2023
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On this page, we explore everything you need to know about uranium. Gain insights into uranium market trends, pricing mechanisms, and the environmental impact of uranium. 

Read on to learn more about this popular commodity and find links to beginner friendly guides explaining how you can get involved in uranium. 

What is uranium?

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Uranium is a radioactive metal that is used to power nuclear reactors and has many other uses. However, the majority of uranium is used by nuclear power stations in generating electricity. Some regions rely on nuclear generated electricity more than others, for example, 75% of all electricity generated in France comes from nuclear power.

Its a valuable commodity for lots of reasons, although growing demand for cheaper and cleaner energy sources has resulted in a bigger need for it. Compared to the worlds most used energy commodities like oil, gas, and coal, uranium is a considerably cleaner and cheaper source of power.

Uranium market overview

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Uranium has been an energy source for decades, but the market took off after World War II. The race to build atomic weapons and the reliance on Nuclear power resulted in a surge in demand. Since then, major uranium deposits have been discovered and mined in countries like the United States, Canada, and Africa. 

In the early years, the uranium market was controlled mainly by governments, but in the 1970s, it began opening to private companies. Shortly after, in the 1980s, the market crashed following two nuclear accidents at Three Mile Island and Chornobyl. Demand and prices recovered in the 2000s thanks to a push for more nuclear power driven by growing electricity needs. 

In recent years, the uranium market has explored steady growth. Its price is tied closely with other energy commodities. For example, when oil and gas prices rise, uranium often follows. This year has seen multi-year highs for many commodities, and the price of uranium has started to follow. 

Is uranium valuable?

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Yes, uranium is a valuable commodity and there are numerous reasons why investors are attracted to the market. We have highlighted some of these key fundamentals below, explaining what they are and why they matter.

  • Capitalise on global energy consumption. Nuclear power is used to generate electricity and for many countries around the world, as much as three quarters of their energy comes from nuclear reactors. As electricity consumption grows globally, the price of uranium will rise with it, as nuclear power plants use more of the metal. 
  • Portfolio diversification. Many investors generally split their investments between stocks and bonds. However commodities like uranium give an easy way to diversify and spread money across a range of assets. When the stock or bond market is down, commodities tend to perform better. 
  • Rising Chinese demand. The majority of electricity produced in China comes from fossil fuels like coal which has led to environmental and pollution problems.As the population grows and the country looks to lower its carbon emissions, the demand for power generated through nuclear plans will increase, as will the price of uranium. 

How to invest in uranium

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You can invest in uranium by using a commodity trading platform. These platforms offer a range of commodities and are very easy to use. There are different brokers suitable for specific requirements.

Some let you buy uranium, others let you trade uranium, and many are designed for investing in the metal. Visit our dedicated guide to discover how to invest in uranium

Uranium in your investment portfolio

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A diverse investment portfolio can help protect you during market uncertainty, and the inclusion of uranium can add value while allowing you to spread your money across various markets. 

Uranium often moves independently to traditional investments like stocks and bonds. You can include uranium in your portfolio as a hedge against potential losses. During times of economic uncertainty, investors view energy commodities such as uranium as attractive options. 

Uranium’s use in various growing industries, such as energy and nuclear power, makes it a good long term play.

Uranium vs other energy commodities

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Uranium is part of the energy family of commodities, including lithium, natural gas, and ethanol. Each commodity is unique in its own way and offers different features for investors and traders. You can learn more about specific energy commodities using our dedicated guides below. 

  • Oil. Oil is a fossil fuel that is refined into gasoline, diesel, and other products.
  • Natural gas. Natural gas is composed mostly of methane and is used to generate electricity. 
  • Lithium. Lithium is a popular commodity used in producing rechargeable batteries for electric vehicles. 
  • Ethanol. Ethanol is a renewable fuel from corn, sugarcane, and other plants.

FAQs

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Prash Raval
Financial Writer
Prash is a financial writer for Invezz covering FX, the stock market and investing. For over a decade he has traded spot FX full time while... read more.