%Uranium prices have fallen below $100 U.S. a pound after hitting their highest level in 16 years.
Currently the metal is trading at $91 U.S. per pound, down from more than $100 U.S. in February. The last time that uranium prices were above $100 U.S. was in August 2007.
The price appreciation comes as uranium producers scramble to meet demand from governments that are looking to nuclear power to help them achieve their greenhouse gas emission reduction targets.
Uranium mines that have sat idle for the last decade are now being revived to meet rising demand for the commodity.
The uranium market crashed after the Fukushima nuclear reactor disaster in Japan in 2011 and many uranium mines were closed as a result. Countries such as Germany and Japan phased out their nuclear reactors.
But now, the Atomic Energy Agency projects that, by 2040, the world will require over 100,000 metric tons of uranium annually. That forecast is more than twice the amount of uranium that’s currently being mined worldwide.
Two-thirds of the global uranium supply currently comes from Kazakhstan, Canada and Australia.
However, U.S. uranium miners are ramping up their operations as prices rise. Ur-Energy (URE) said it plans to double the capacity at its Shirley Basin mine in Wyoming to 2.2 million pounds annually.
Other U.S. miners such as %IsoEnergy (TSXV: $ISO), %EnergyFuels (TSX: $EFR), and %UraniumEnergy (NYSE: $UEC) have announced that they are restarting production at idled mines.
Analysts at %Citigroup (NYSE: $C) recently forecast that the price of uranium will average $110 U.S. a pound in 2025 due to supply constraints amid rapidly rising demand.
Other analysts are forecasting that the price of uranium will reach $150 U.S. a pound over the next 12 months.