Justin Huhn, Founder and Publisher of the Uranium Insider, joins us to provide a comprehensive macro update on the supply and demand fundamentals for uranium and the nuclear fuel sector, how the longer-term contracting cycle is setting up, and how he is positioning in the uranium equities.
After seeing the u308 spot prices surging over $100 per pound in the last two months, and very nice moves higher in many of the more established uranium mining stocks, we dig into the where the supply is actually going to come from to feed the increasing demand for uranium. Justin breaks down what we know about the past and forward guidance for largest producers like Kazatomprom, Cameco (CCO.V) (CCJ), and Orano. He also reviews the US-based producers that are projected to add in more production over the next few years like enCore Energy (EU.V) (EU), Energy Fuels (EFR.TO) (UUUU), Ur-Energy (URE.TO) (URG), Peninsula Energy (PEN.AX) (PENMF), and Uranium Energy Corp (UEC). Despite all these different producers rushing to bring more production online, it is still nowhere close to enough to fill the shortfall in supply to meet the rising demand.
Next we discuss the importance of the longer-term off-take contracting cycle, between the utilities and the uranium mining companies, and what market signals we can take away from the recent higher levels seen in contracts. Additionally, Justin touches upon what this means for the overall health of the uranium companies if they have locked in much higher prices for uranium sales contracts years into the future. In addition to supply and demand fundamentals driving the pricing in this sector higher, there is a also somewhat of a romantic nuclear renaissance going on in nuclear energy on the global stage, with many nations changing their opinions on the importance of nuclear power, and it’s place in the energy mix.
We wrap up by getting Justin’s thoughts on where we are with the moves in uranium stocks versus the moves we’ve seen in the spot pricing, and how the larger sector leaders have been outperforming the smaller juniors as investment funds primarily are seeking liquidity. However, we note that recently the Sprott Junior Uranium Miners ETF (URNJ) has started to outperform Cameco, which shows investor appetites are growing for the small and mid-sized uranium companies. Justin shares how he is managing his portfolio, making a few trades, but mostly staying long and strong with his current portfolio picks.
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