Get Positioned to Capitalize on Huge Looming Uranium Supply Crunch
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- Опубликовано: 20 янв 2024
- Interview with Dustin Garrow, Uranium market expert and consultant
Recording date: 19th January, 2024
The uranium spot price has risen dramatically from below $50 in early 2023 to around $106 now. However, term contracting prices continue to lag behind and need to increase significantly to incentivize new mine development. Major producers like Cameco and Kazatomprom are facing delays and difficulties in ramping up production. Supply from Africa and the US also faces significant obstacles.
On the demand side, utilities have gotten used to very low prices over the past decade, paying only $43/lb on average since 2011. After decades of oversupply, the uranium market now faces critical underinvestment on the production side. Restarts of idled mines are nearing an end, with focus shifting to higher-cost and technically challenging greenfields projects often run by inexperienced management teams. This introduces new risks that could further delay supply growth.
With high-cost Russian and African supply increasingly going to Russia and China due to their strategic investments, Western utilities face more limited contracting options. However, their contracting activity continues to lag demand growth. Term prices likely need to be in the $75-80/lb range currently to incentivize new Western mines. But utilities have been resistant to accept such increases after a decade of low prices.
Long contract settlement lags mean utilities can delay the impact of higher prices on their books by 3-5 years. But without more contracting, project development will stall and availability shortages could start forcing reactors offline by the end of the decade, accelerating nuclear's decline. SMRs also face fuel supply issues already. Utilities must sign more long-term contracts soon to prevent a supply crisis. But producers also don't want to lock in too low prices before the market potentially moves higher, adding to the standoff. Overall the market is entering an exciting early stage where significant further upside in uranium prices seems likely over a multi-year period.
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$10 increase on 2 million lbs transacted.
WOW💥...that is the info we need...thanks great interview fellas!!!
Matthews interviews with Dustin are SUPER VALUABLE 😊
Yes I might have a short attention span. When it comes to Dustin interviews … it is mandatory to listen to his interviews multiple times.
Highly concentrated.
Excellent interview and good to have him on the Deep Yellow team $DYL
Stellar production Matt. You raise the bar for others, the viewers here benefit! Thank you for posting.
Absolutely fascinating interview brilliant interview Matt you guys covered so much stuff in this interview it's one of the best I have watched in 3 years Garrow knows so much about this industry it's incredible
Dustin thank you. Great for sentiment and pure knowledge for insight. 👍
Great interview and fantastic information. Makes me every excited for 2024 price action
Matt, always a pleasure to watch your show.
Really happy to hear the name Denison......WOW....!!!
They are so ultra quiet. Didn't they just do a deal recently with regards to lithium or something to that effect.?
Its EXTREMELY important to report exciting events that your company is doing.
They really don't reveal anything in detail when they enter an interview.
Its crazy....!
Dustin has been right, his insights are priceless
Always enjoy listening to Dustin's interviews. Thanks
Nexgen waiting on federal approval. Its a winner.
I wish they commented more on SMR, when this technology is really coming.
Thank you for the great content.
Thankyou Matt
👍👍👍👍👍👍💪👌👌🍻
My pleasure!
Uranium bull here through and through….But I’m still baffled by the apparent lack of urgency (or so we have been told for years now) by the fuel buyers within the utilities to secure their pounds.
I understand it’s a mere 5-10% of their total op ex and when they are told to buy fuel, they go out and buy fuel. But the writing has been on the wall for some time now.
Is it simply a different corporate culture all together that most of us just aren’t privy to?
Trying to understand the utilities thought process here…
Perhaps the supply crunch of uranium is not so realistic anyway. It is perhaps just like all the fuss about the oil price going to 100$ in 2023, but now there is so much oil on the market that every oil bull is worried the oil price will dump again.
Utilities are fairly clueless when it comes to resource trends and commodity cycles. They will sleepwalk right into supply crunch. That has been an integral assumption of the thesis. I’m not baffled. They are doing basically what I expected.
To my understanding "fuel buyer" isn't a job title. They are nuclear engineers who buy fuel once every 7 or 8 years because there is no one else there to do it. They aren't keeping track of the market or doing anything investors are. They aren't even procurement people. It's just a minuscule part of their job, many of them have never done it before. It typically isn't an important purchase because it's not a historically significant part of their costs.
@@thorsrensen3162in the last 13 years, the fuel buyers came out and made an offer, load of uranium suppliers would offer a competitive price. You would be complacent if that was the case for you for 13 years. There is no realisation till they run out of fuels to buy
Completely avoided talking about Paladin during his Namibia and greater Africa discussion. Almost seemed intentional the way he kept listing projects and dancing around it.
Keep in mind if u can finally get approval ( can take years ) to build N powerplant it takes 10 years to build before fueling
I don’t understand why the utilities are worried about being gouged, when nobody was worried about producers when the price was way below the cost of production not for just a little, but for a decade or more. What the cost for Cameco putting assets on care and maintenance, which was substantial. Shouldn’t they be allowed to recoup some or all of those cost. Now that the shoe is on the other foot the utilities are saying oh please don’t gouge me.
Soo if i was a utility, I'd be looking to secure pounds via ownership of the deposit. If the cost of energy is only 2-5% of all in cost. It's really not that much capital to out lay for security of supply. But to mitigate my risk, I'd invest in the lowest risk assets. The question I have who does this. When do they finalise and with what deposits. I can't answer any of that so I'll just keep holding my picks until 2027 I guess
"I don't have a reactor out there that needs this stuff, I've got a hole that I think I'm gonna put in the ground. I can wait..." haha
Actually mining executives very much want their project to succeed, they are not keen to quit their job and do AI
So, buy the explorers or the miners? I currently own Dennison and Cameco.
I own DNN and have CCJ exposure only through URNM. Producers have run up the most. Explorers have moved the least. I bought some tranches to top off positions late last year, and added to a few select explorers this month. I looked at the chart pattern of each company, and then compared the share price of each to UX1 to decide what to buy. I expect explorers to move last and catch up big.
DNN and NXE here
UEC AT SPOT AND START UP AUG A LOT OF MONEY GOING THERE.
Boss Energy has agreements with Encore Energy has agreements with Anfield Energy who owns one of three licensed mills in US and it trades under ten cents but not for long. Thank me later ✌️
Interesting. Thank you. I see they have warrants as well
What about Australia
Can Denison mines, CCJ or Forsys deliver the uran and start earning money.
I hope not. If they can’t, it’s going to signal decreased future supply and drive share price speculation even higher in the overall sector.
BHP are not stupid. They are sitting on a thing that you think might be big but they know its biigger than the biggety biggest x biggest with knobs on. Go 92.
Arrow deposit could deliver millions of lbs of U per year. But they aren’t even permitted and then have to build a mine. It’s gonna be a long while.
What about the possibility of newer smaller safer Thorium Reactors.
That I suspect have been quietly and proprietarily worked on for the last 15-20 years.
Using Uranium is only to produce Plutonium. Which is less is less in demand.
Humanity should have learned several rules about nuclear reactors.
Never use the moderator as your coolant.
Never use incredibly high pressures (superheated steam).
Use atmospheric pressures that are "walk away" safe.
Your mileage may vary.
Just my thoughts that seem obvious after years of reactors basically designed for ships and submarines.
Wall Street Bets will probably drive insane speculation our way. If they will bid bankrupt companies up to wreck institutional shorts, they will bid the most moosepasturey companies up. I like to invest on fundamentals but I think soon they won't matter a bit.
I agree that during the euphoria stage fundamentals won’t matter. I have about 4 positions that I invested solely on fractals and chart patterns with intention to hold my expectations on them for the euphoria to show up.
Wall Street Bets folks still aren’t interested in uranium yet. Will they and when?
@ryanoquinn1068 maybe they will try shorting us 😅
reminds me of lithium 2 years ago.. whole sector full of sleazy types and daytraders
all sizzle no steak - all talk no walk..
this i 1000% hype - FOMO FOMO FOMO zero interest!!!!
uranium goes tothe moon in a holding pattern..lol...
Uranium take too long... too many regulations and red tape... also finding large deposit Uranium is way harder then gold... why would anyone want to mine Uranium
This is one area where the efficiency of a Xi and Putin dictatorship that can streamline U pounds from Kaz to their storage has a massive advantage versus our bloated bureaucracy we call a government.
Watch the price and you'll understand what a bull market is! 😂
Why would any doctor want to specialize in buttholes?There's a market for it.Thats why.
106 dollars a pound is why, lol.
And waaay to go up.......💪