The Balance of Supply and Demand

Abstract

Uranium is a commodity, and like any other is subject to the laws of supply and demand. In a number of respects, however, it is unique. First, it is a very young commodity: prior to World War 2 it had virtually no industrial uses, if we exclude minor applications like ceramic decoration. When the military demand was created, a whole new mining industry had to be brought into existence. Later the civil nuclear power programme started, which meant that a rapidly rising demand had to be matched by a similar increase in uranium availability — despite lead-times on both sides of the industry of around 10 years. The major shifts in energy policy in the 1970s were inevitably reflected in correspondingly severe fluctuations in the market conditions for uranium.