Investing.com -- China's growing demand for uranium is shaping the global market as the country intensifies its reliance on nuclear energy and potentially expands its nuclear arsenal, according to Citi analysts.
Citi reports that China's uranium imports are poised to rise significantly over the coming years, driven by both its increasing energy needs and geopolitical considerations.
"Even though stockpiles in China are on the rise, current and future demand for uranium is set to increase and, as a result, the level of imports could intensify in the coming years supporting the bullish narrative for U3O8, per our base case," writes the bank.
As of 2024, China's utilities require 14.6 kt U (38 million lbs), or 22% of global uranium demand, a figure expected to rise to 24.6 kt U (64 million lbs), or 28% of global demand by 2030.
"Uranium requirements by utilities would increase every single year (in all scenarios) as the country is actively building its nuclear fleet," adds Citi. "The base case assumes cumulative uranium demand by China of 250 kt U (650mln lbs) between now and 2035."
In addition to energy demands, China's geopolitical stance, including potential plans to scale up its nuclear warhead arsenal to match that of the U.S. and Russia, may further boost the country's uranium needs.
Citi estimates that this expansion would require 84.6 kt U (220 million lbs) of uranium. However, China's domestic uranium production remains modest, with output at just 1.6 kt U (4 million lbs) in 2024, making the country heavily reliant on imports.
Citi explains that China's current uranium stockpiles stand at approximately 173 kt U (450 million lbs), built largely through imports from Central Asia and Africa.
The bank's analysts warn that China's future import policies could be destabilizing for the global uranium market, with the country's share of global uranium demand expected to rise to 36% by 2040.
As Chinese utilities increasingly turn to international markets, Citi projects that China's dominance in uranium procurement will only grow, creating potential volatility in global uranium prices.