Uranium: Bull market could extend - 01/15/24

Chart of the Day: (01/15/24)

Sprott Physical Uranium Trust

(U.UN, TSE)

Open Position: 13.5%

ACB: $20.50

Last: $32.15

Stop: TBD in context of mkt.

• Nuclear power contributed about 10% of the world's electricity generation in 2022. At the recent COP28 meeting 22 nations, including the US and UK, signed an agreement to triple nuclear power production by 2050 with 57 new plants currently under construction worldwide (21 in China). 

• Last week, the world’s largest uranium producer, Kazakhstan's Kazatomprom, announced they will fall short of production targets, so I spent some time revisiting the global uranium supply demand situation this weekend. Now I am hearing there might be production issues at the world’s second largest producer, Cameco’s Cigar Lake mine.

• People smarter than me told me two years ago that we were about to see a new contracting cycle, where undersupplied utilities needed to stock up. But, with an obvious shortfall of supply for the next few years, and production issues at the largest producers, no one wants to sell.

• Pounds held by traders and national governments are being held tight. Strategic inventories are priceless in a structurally undersupplied market. The near/mid-term cupboard is bare.

• I think I may have underestimated how long this cycle is going to last, and how high the price of Uranium might go. 

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