Uranium prices are mainly influenced by aboveground mine supply and demand for nuclear energy. To understand where those stand, investors in this sector typically look to: output from uranium mines the number of nuclear reactors online, under construction or planned the signing of long-term contracts between uranium suppliers and utilities companies Analysts with a bullish lean believe the uranium market cycle has reached its bottom and that a break to the upside for uranium prices is supported by positive supply and demand fundamentals. On the demand side, nuclear energy generated from 440 reactors around the globe supplies about 10 percent of the world's energy requirements. China alone is constructing 21 new reactors at the moment, while Russia is constructing three with another 11 planned and India has eight nuclear reactors under construction. A World Nuclear Association (WNA) report forecasts 2.6 percent annual growth in nuclear generation capacity over the next two decades for a total of 615 gigawatts electrical in 2040. About 79,400 tonnes of uranium will be required to feed these reactors in 2030, up from 62,500 tonnes in 2021. This figure is expected to grow to 112,300 tonnes of uranium in 2040. On the supply side, major uranium producers are still not producing at full capacity, while new uranium exploration and development projects are few and far between. Highlighting these circumstances, the WNA points out that world uranium production dropped from 63,207 tonnes of uranium in 2016 to 47,731 tonnes of uranium in 2020. The organization also notes that “only 74 (percent) of 2020's reactor requirements were covered by primary uranium supply.” Huge cuts to global uranium production have come from Kazakhstan, the world's largest uranium-producing country. Responsible for 41 percent of global uranium production, the Central Asian nation began reducing its annual production levels in 2018 and plans to continue "flexing down" its uranium output through 2022. Australia, Namibia, Canada and Uzbekistan are also among the world's biggest uranium producers. In Canada, Cameco shuttered the Saskatchewan-based McArthur River mine in 2018 and temporarily closed Cigar Lake — the world's top uranium mine — in response to the COVID-19 pandemic. There are some signs of an uptick in uranium production since 2020, with the WNA reporting that 2021 global uranium output increased by 601 tonnes to cover 77 percent of reactor requirements for the year. In mid-2022, Kazatomprom announced would be increasing its uranium output throughout 2023 and 2024 based on expected demand levels. Additionally, Cameco brought the McArthur River/Key Lake operation back on line in November 2022. The company plans to produce 15 million pounds of uranium per year from these operations by 2024, which is 40 percent below their annual licensed capacity. Despite these positive signs, supply deficits are likely to continue in the years ahead. "Uranium production volumes at existing mines are projected to remain fairly stable until the late 2020s, then decreasing by more than half from 2030 to 2040," the WNA report states. This is also due in part to the lack of uranium exploration in recent years. The organization’s research shows that uranium exploration spending fell by 77 percent from 2014 to 2018, dropping to US$483 million.