RE:let's be honest people, quakes, malcolm, etc"Nor will there ever be" is exactly the type of investor sentiment I look for.
To invest profitably you need facts. Hard numbers that prove or disprove your case. For you to say that indicates a profound lack of understanding of the Uranium market place and the technology of Uranium mining, processing as well as nuclear reactors.
All....every single one....of those factors you mention is at play right now. If you are in this business as a serious investor (not a day trader) you will know that the seeds of a Uranium Bull market are sown in the ashes of the preceding bear market. Exactly where we are right now. Supply IS decreasing as we speak and demand IS increasing at its fastest rate in years. Those two things are on a collision course.
Because you do not understand Uranium you are making the grave mistake that it behaves like every other commodity...that a cut in supply causes an immediate increase in spot price. Such effects DO happen with oil, and copper and zinc and tin....but it does not and never will happen like that with Uranium. That is because of the lead time needed for new mine supply (10 years is typical) and the lead time needed to procure Uranium to turn it into usable fuel assemblies (typically two years or more.
If I wind the clock back to the start of the last Uranium Bull market many statements just like yours were being made. Those are a clear signal to investors ike me....music to my ears in fact. I scour the internet for them.
You will note from all of my posts that I have not said the Uranium Bull market is here now (it isn't - yet) and my prediction still stands at late 2020 for things to really move. What I have said consistently is that all of the factors required for Uranium shortages to occur are taking place. You listed most of them. The question you need to answer in your own mind is this.
Is there enough Uranium Inventory to keep all the worlds reactors running with no mined supply? This is important because no miner can make money at current prices therefore there will be no miners of Uranium if current pricing continues. No company can continue to lose money and stay in business. Either prices rise or mined Uranium supply ends and when mined supply ends already mined inventory is used up and when that is gone reactors shutdown. That simple really.
All of those items you speak of take some time to work through the Uranium supply chain.None of them are immediate.
You also make the second grave mistake with this commodity by implying that it is inventory that dictates commodity price. It is not. It is security of supply that drives this market. It is when that supply security is threatened that buyers flood the market as they have done twice before.
Inventory IS a major factor in almost every other commodity but not Uranium. It is that factor which distinguishes it from all other commodities.
Lete me illustrate with an example...copper. When copper prices rise due to mine supply issues or high demand users of copper look for cheaper alternatives. Plumbing component manufacturers resort to plastic pipe instead of copper. Telecomms companies moved from copper to fibre optics. The result is that copper demand falls because there are alternatives. Look at any modern house and you will see that plastic has all but replaced copper to carry water. Copper wire is all but gone from the telecomms industry and the reason is simply price. The cost of copper was a significant contributor to the plumbing costs of a house...now it is not.
Now let me turn to Uranium. Reactor operators do have choices when it comes to fuel. They can use reprocessed uranium from used fuel instead of mined Uranium. They can mix the Uranium with Plutonium from used fuel...Plutonium actuallly burns better than Uranium in most reactor designs. But both of these options require the reprocessing of highly radioactive used fuel and is far more expensive than mined Uranium. In addition only a few nations have that capability. France, UK and Russia...perhaps China also by now. Mined Uranium would need to be in the $200 to $400 range for these technologies to be cheaper plus it needs some reconfiguiring of the core reactor physics to make them work properly. So there is no incentive on the part of operators to use these alternatives. In addition electricity from a nuclear reactor is not sensitive to Uranium spot prices. The cost of the Uranium itself is an insignificant part of the fuel cycle costs and an even smaller part of the cost of running a reactor. Uranium can go as high as it likes and operators will still buy because they have no choice. Unlike the example of copper, all the other alternatives are even costlier not cheaper.
That is why, when prices start to move, buyers will want to lock in for long term contracts to (a) fix the price so they can budget their fuel costs better and (b) ensure they have security of supply to keep operating in the event of supply shortages.
As Rick Rule is fond of saying...the cure for low prices is low prices.
So to make a sweeping statement that there will never be another Uranium Bull market tells me that your undesrtanding of the Uranium industry is flawed.
There is one development that I am watching very carefully which DOES have the potential to disrupt the Uranium mining industry and that is the large scale extraction of Uranium from Seawater. For China, India and Japan and even the USA - the availability of a technology that can make them independent of any fuel supplier or country is highly attractive. If you have access to seawater then you can develop a completely independent Uranium supply chain. The technology is not there yet and the costs remain much higher than mined supply but that will change. Will it be there before the next Uranium Bull market...I do not think so...at least not on a scale to challenge conventional mining. I do believe this will be the very last Uranium bull market because seawater supply will become cheaper and of course it is a virtually limitless supply. No need to ever prospect for Uranium or build costly mines. Just pump seawater.
For many many countries that is too good an opportunity to pass up. Complete energy independence forever. For China India Russia Japan and the USA being able to operate all your reactors without buying any foreign supply of fuel EVER is just very very good business.
So the way I see things is that the factors you mentioned (plus a few others) will combine in the next couple of years to drive Uranium prices up...much higher than the last bull market because there are so many more reactors and so few mines. It will also last longer than before because of the shortage of new mines coming on stream. What will end it is seawater extraction of Uranium. When that technology looks like it can work at even a half decent price no-one will need mined supply. That is the time to short Uranium miners.
Whatever I say is not likely to convince you...your mind is clearly already made up for whatever reason...but when the inevitable happens I will ask you to acknowledge that I was right. And of course if nothing at all has happened by late 2020 then I will similarly acknowledge the accuracy of at least part of your statement.
But to say there will never be another bull market in Uranium? A bit nuts really.
I am quite sure you are wrong about that but only time will tell.
Regards
Malcolm
bull_man wrote: There is no uranium bull market now, nor will there ever be; "if" the following can't move the needle: - Cameco cuts and mine stoppages - Kazatomprom multiple cuts - Multiple uranium mine closures world-wide - Uranium exploration projects shelved world-wide - Kazatomprom IPO - Yellow Cake IPO - Japan restarts - Most reactors in operation ever - Most reactors being built in the last 25 years - Dried up secondary supplies - Climate change initiatives calling for clean energy alternatives - Electricity demand to increase significantly with the slowing dependence for oil - and many more catalysts which I can't even think of at the moment Then tell me people, what exactly will move the needle??? and when??? the spot price has gone up a whopping $3 from $20 to $23 with all of this and much more happening over the course of months and years; let's be honest people....