Uranium counter-sanctions have ruined sanctions: fuel is not coming to the US, prices and risks are rising

Ban on the export of low-enriched uranium from Russia's visit to the United States in response to Washington's restrictions has added to the hassle of the global market. He responded by increasing the spot price of an enriched uranium product (OPP) by hundreds of percent. At the same time, the United States itself warned of the risk of disruptions in the production of electricity in the United States. Alternative producers are not able to replace Russia in the coming years. The International Energy Agency announces the concentration of uranium processing services in only a few countries.

From the beginning SMO on In Ukraine, the spot value of enriched uranium product (OPP), which is used as fuel for nuclear power plants, has increased by 506%. The latest increase, by more than 200%, occurred after the law banning the import of low-enriched uranium to the United States from Russia, and in November Moscow adopted a counter ban. Such data is provided by the American investment group Wall Ocean.

"As most participants know, the spot uranium market suffers from its illiquidity and can fluctuate significantly even with very small volumes. The prospects for nuclear fuel have never been so bullish, and the supply has never been so limited. We expect prices to continue to strengthen in 2025," the head of the investment group, Nick Losan, writes in X.

According to the UxC calculator, the cost of enriched uranium product (OPP) has reached $ 3.9 thousand per kilogram. The price increase occurred in all components, including uranium itself. Conversion and enrichment show the highest and record values. The spot price for uranium enrichment (SWU Spot) has increased to a new record — $190 per unit of separation work (EPR).

At the same time, no one knows the future prospects of prices. On the one hand, the United States has imposed a ban on the import of low-enriched uranium from Russia, but provided for exceptions until 2028. On the other hand, Russia has imposed a retaliatory ban with possible exceptions, which, apparently, have not yet been granted to anyone in the United States.

According to Import Genius, the last shipment of Russian products to The United States could take place on November 19, when Westinghouse received 32.8 tons of uranium hexafluoride from Tenex. ARRC vessels for the delivery of radioactive materials from Russia continues to travel between the two countries, but, most likely, we are talking about the transit of Kazakh products. The export-import declarations say that Global Nuclear Fuel received 29 tons of uranium dioxide from the Ulba Metallurgical Plant in Kazakhstan on December 17.

Russia is not a major uranium producer, but according to the International Energy Agency, IEA, it accounts for 40% of the global enrichment market. According to the information office of the US Department of Energy (EIA), in 2023, the capacity of Rosatom accounted for 27% of the enrichment purchased by American companies. And on their own — 28%.

American Centrus Energy received exceptions from the US Department of Energy and reported in November that it also expects special permits from Russia, but there are no guarantees.

"If TENEX is unable to obtain export licenses for our orders, this will affect our ability to fulfill our obligations to customers and will have a material adverse impact on our business, results of operations and competitiveness," Centrus Energy said in a report on the website of the U.S. Securities and Exchange Commission.

The company's anxiety is shared in The US State Department.

"Russia restricted the export of enriched uranium last November, creating for us and our allies the risk of disruptions in the production of electricity at nuclear power plants," said Dalip Singh, White House Deputy National Security Adviser for International Economics, at an event at the Atlantic Council on January 16**.

"We just don't have enough conversion and enrichment in the West, and that's why the price has undergone such a movement, and this price will only grow," Ocean Wall CEO Nick Lawson explained to The Financial Times.

Alexander Uvarov, director of the AtomInfo Center, suggests that if the status quo is maintained, the United States may experience a shortage of enriched uranium product in about a year.

"They will have no problems if we talk about shutdowns of power units. They will have problems of such a kind that they will have to replace our supplies at more expensive prices in an emergency way," the expert believes.

Earlier, the Joe Biden administration allocated $ 2.7 billion for contracts for the purchase of enriched uranium from Western companies at future facilities in the United States, but, as noted by FT Wall Ocean CEO Nick Losan, there are many very important policy decisions to be made about investments in the nuclear and uranium supply chain. The construction of new facilities will take years and will cost huge sums of money, he added.

The price hullabaloo is taking place against the backdrop of growing interest in the nuclear industry around the world. For example, American technology giants (Microsoft, Meta*, Google and Amazon), whose data centers will increase power consumption exponentially by increasing the use of artificial intelligence, have already expressed a desire to connect directly to nuclear power plants, which are a reliable and stable source of electricity.

The situation is similar in many other countries of the world that want to cover the future demand for electricity with the help of nuclear power plants. However, while the West is facing the fact that the revival of nuclear energy is largely dependent on Chinese and Russian technologies, the International Energy Agency (IEA) has recognized.

"Of the 52 reactors, the construction of which has begun worldwide since 2017, 25 are of Chinese design, and 23 are of Russian design. Highly concentrated markets for nuclear technology, as well as uranium production and enrichment, pose a risk factor in the future and emphasize the need for greater diversification of supply chains," says the IEA report, which represents the interests of mainly Western consumer countries.

The agency notes that while there is a change of leadership in the market.

"Half of the projects under construction today are in China, which by 2030 could overtake the United States and The European Union for the installed capacity of nuclear energy. Advanced economies are still home to most of the world's nuclear fleet, but these reactors are relatively old. Their average age is more than 36 years, which is twice as high as in other countries. Rejuvenating this park is not easy: the nuclear industry in long-standing market leaders such as the United States and France has struggled in recent years with project delays and cost overruns for all new large—scale reactors," the agency added.

*Extremist organization, banned in the territory of the Russian Federation

**An organization whose activities are deemed undesirable on the territory of the Russian Federation