Nuclear fuel prices surge due to uranium conversion and enrichment bottleneck

The cost of nuclear fuel has surged in the past two years, primarily due to bottlenecks in uranium conversion and enrichment, exacerbated by the Russian invasion of Ukraine. While the price of raw uranium ore has doubled since early 2022, the prices for converted uranium hexafluoride have soared fourfold to $68/kg, and enriched uranium prices have tripled to $176 per separative work unit, according to UxC data seen by the Financial Times (FT).

Russia’s significant control over 22% of global uranium conversion capacity and 44% of enrichment capacity has led to supply chain disruptions, especially as Western utilities have reduced reliance on Russian services following sanctions, including the US ban on Russian low-enriched uranium. Although companies like Orano and Urenco are expanding enrichment capacity to counter this dependency, no new conversion facilities are currently being developed in the West.

Despite the increased demand for nuclear fuel due to global nuclear expansion, the World Nuclear Association notes that advancements in fuel efficiency have mitigated additional cost pressures. However, without sufficient capacity outside Russia, fuel prices remain volatile.