What is China’s Role in the Uranium Market?

China’s increasing demand for uranium is significantly influencing the global market, as the nation enhances its reliance on nuclear energy and potentially expands its nuclear arsenal, according to analysts from Citi.

The report reveals that China’s uranium imports are expected to surge in the coming years, driven by rising energy demands and geopolitical factors.

Despite the rise in stockpiles, current and future uranium demand in China is anticipated to increase, leading to heightened levels of imports, which aligns with a bullish outlook for uranium prices, particularly U3O8, according to Citi’s base case scenario.

By 2024, China’s utilities will require 14.6 kilotonnes of uranium (38 million pounds), representing 22% of global demand. This figure is projected to increase to 24.6 kilotonnes (64 million pounds), or 28% of global demand, by 2030.

Citi notes that the requirements of utilities will grow annually in all scenarios, as the country actively expands its nuclear fleet. The base case anticipates cumulative uranium demand of 250 kilotonnes (650 million pounds) in China between now and 2035.

Beyond energy needs, China’s geopolitical strategies, which may include plans to augment its nuclear warhead stockpile to rival those of the U.S. and Russia, could further elevate its uranium requirements. Citi estimates that such expansion could necessitate an additional 84.6 kilotonnes (220 million pounds) of uranium. However, domestic uranium production in China remains relatively low, with output projected at only 1.6 kilotonnes (4 million pounds) in 2024, making the country heavily reliant on imports.

China’s current uranium stockpiles are approximately 173 kilotonnes (450 million pounds), predominantly sourced from Central Asia and Africa. Analysts from Citi warn that China’s future import strategies could create instability in the global uranium market, with its share of global demand expected to rise to 36% by 2040.

As Chinese utilities increasingly engage with international markets, Citi predicts that China’s influence in uranium procurement will grow, potentially leading to volatility in global uranium prices.