The uranium price is at a 10-month high of US$92.55 on Tuesday.
Yellowcake has been steadily rising on global commodity markets since March last year.
Uranium has risen 12.3% over 12 months amid greater demand due to the green energy transition.
Many countries are embracing nuclear energy as part of their green energy mix.
This is because nuclear power plants do not produce carbon dioxide emissions when they generate electricity.
The rising uranium price has benefited ASX uranium shares, and the Federal Department of Industry, Science and Resources says there is more growth to come over the years ahead.
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Uranium price set to rise to US$113 per pound
The department released its September quarter Resources and Energy Quarterly on 1 October.
The report includes a five-year outlook for a large range of commodities, including uranium.
The department says the uranium price averaged US$82 per pound in FY26.
For FY27, the department expects the uranium price to ascend to an average of US$93 per pound.
By FY31, the department projects an average price of US$113 per pound, up 38% on today's value.
Australia has the world's largest uranium reserves and is currently the world's No. 5 producer.
According to the Quarterly:
The continued rollout of nuclear reactors is projected to increase uranium consumption from 97 Kt in 2026 to 107 Kt in 2031.
Supply (including secondary supplies) is forecast to rise from 89 Kt in 2026 to 106 Kt in 2031, remaining constrained during the outlook period.
Australian export values are projected to rise from $1.7 bn in 2025–26 to around $1.8 bn (in real terms) in 2030–31.
Uranium is one of the few commodities that the department expects to remain on an upward trajectory through to FY31.
It expects most commodities, like lithium, to peak in FY27 before paring back through to FY31.
Besides the green energy transition, the department says uranium demand will increase due to energy security concerns.
Geopolitical tensions have strengthened interest in energy security and fuel diversification across major economies, particularly in Europe and the United States.
Ongoing disruptions to global energy markets and European concerns to reduce reliance on Russian energy imports have increased support for new reliable partners and low-emissions energy sources.
The world's fastest-growing consumers of uranium are China and India.
Which ASX uranium shares should you buy?
Morgan Stanley put a buy rating on Paladin Energy Ltd (ASX: PDN) shares on 19 October.
The broker has a 12-month price target of $9.95 on Paladin shares, indicating a potential 33% upside ahead.
Canaccord Genuity reiterated its buy call on Boss Energy Ltd (ASX: BOE) shares on 29 October.
The broker has a share price target of $2.10, indicating a potential 50% gain ahead.
Canaccord also sees enormous potential growth in Deep Yellow Ltd (ASX: DYL) shares ahead.
On 28 October, the broker reiterated its buy call on Deep Yellow shares with a $2.80 target.
This suggests the stock could rise by more than 291% over the next year.
BMO Capital initiated coverage of Bannerman Energy Ltd (ASX: BMN) shares on 1 November.
The broker gives this ASX uranium share a buy recommendation with a $4.50 target.
This suggests 33% upside from here.
Yesterday, Ord Minnett reaffirmed its buy rating on Lotus Resources Ltd (ASX: LOT) shares.
The broker has a 12-month target of 25 cents, implying 35% upside from here.
