Buying opportunity of a lifetime in my humble opinion. Uranium equities are likely to outperform the commodity by at least 2.5x, and probably relatively quickly. I also fully expect spot prices to continue upward over 2024 and beyond.
Potential near term fundamental catalysts:
1. Major producers Cameco and Kazatomprom likely to miss production goals for 2024 and 2025. Will have clarity on both these in coming weeks.
2. Russian Uranium ban. House has passed HR1042 already, senate is dragging their feet because Ted Cruz is a douche nozzle. Will almost certainly pass eventually. Not that big of a deal on it's own, but Putin might retaliate by banning uranium exports to the west, which would be a big deal.
3. Sentiment is nowhere near "euphoric" yet. Media attention phase is just beginning.
4. Huge supply/demand imbalance. Most cannot comprehend how out of whack this tiny market is. Price of physical uranium was dirt cheap for a decade following Fukushima, that is over. Huge supply deficits in coming years and no meaningful added supply to come online for 3 years, MINIMUM.
It sounds ridiculous, but $200/lb spot uranium by the end of 2024 is not unreasonable at all. Utilities will pay any price because it is such a small part of their total operating costs. It is far more expensive to shut down a nuclear plant and restart it later than to bite the bullet and buy uranium at any price.
Cheers!
Potential near term fundamental catalysts:
1. Major producers Cameco and Kazatomprom likely to miss production goals for 2024 and 2025. Will have clarity on both these in coming weeks.
2. Russian Uranium ban. House has passed HR1042 already, senate is dragging their feet because Ted Cruz is a douche nozzle. Will almost certainly pass eventually. Not that big of a deal on it's own, but Putin might retaliate by banning uranium exports to the west, which would be a big deal.
3. Sentiment is nowhere near "euphoric" yet. Media attention phase is just beginning.
4. Huge supply/demand imbalance. Most cannot comprehend how out of whack this tiny market is. Price of physical uranium was dirt cheap for a decade following Fukushima, that is over. Huge supply deficits in coming years and no meaningful added supply to come online for 3 years, MINIMUM.
It sounds ridiculous, but $200/lb spot uranium by the end of 2024 is not unreasonable at all. Utilities will pay any price because it is such a small part of their total operating costs. It is far more expensive to shut down a nuclear plant and restart it later than to bite the bullet and buy uranium at any price.
Cheers!
Comment:
Today, Kazatomprom confirmed that it will be lowering production targets for 2024 by 14% which is roughly 7% of the entire world's supply. The uranium space reacted very positively, which is what I was expecting and hoping for. This has finally caught the attention of nuclear utilities. The whole uranium bull thesis is centered on the fact that there is a supply deficit that cannot be fixed for several years, and eventually there will be a rush to secure supply, and there simply won't be enough uranium for everybody. Uranium demand is completely price inelastic, utilities will be far more concerned about securing supply than what the price is. First domino fell today, looking good!