RE:RE:RE:RE:RE:RE:RE:The BULL market That is a very difficult question to answer. If the right positive catalysts are there it very well could start before then and I certainly would not suggest that view is incorrect.
From my point of view it doesn't matter much because I have been steadily building positions in a number of companies for about four years so anything I care to add now would just be icing on the cake.
Some would argue that it is Japanese restarts that will be the catalyst - Rick Rule and Tim Gitzel the CEO of CCO maintain that position - but I am not so sure. Certainly it is important but there are now more reactors under construction than the entire nuclear fleet in Japan so I think the Japanese effect is fading quickly. Still important but not as much as 18 months ago even. In other words the share of demand from Japan is falling with respect to the rest of the world and that trend will continue.
Also this is such an opaque market that any predictions (including mine) are very speculative and they can only be calculated guesses. So to take the opaqueness out of the equation you need to look at supply and demand fundamentals. Who has the Uranium, in what form is it in, where is it and in which countries. Who has stockpiles and why? Many of these are social and political questions and outside the realm of normal supply and demand fundamentals and therefore cannot be realistically answered from a purely business perspective.
The key question is when does security of supply for reactor operators get threatened. That is when the mindset changes. There is also the time lag question to consider. If you start a construction project now the Uranium to make the fuel assemblies needs to be procured about half way through the construction schedul or sooner in some cases. For many of the 56 plants under construction that is about now.. That also means that enrichment of he Uranium needs to begin now. In turn that means enrichers are going to stop underfeeding in favour of the more lucrative fuel enrichment process. Simultanoeously spot supply disappears at a time when demand is increasing. Add to that the CCO spot market buying decision and you have all the ingredients for a price explosion.
So more reactors will come on line in Japan at the same time as a fleet bigger than that of Japans entire nuclear operation is coming on line. That is a demand double whammy All of that Uranium cannot come from the mere 40M lbs that comprises spot market. Nowhere near enough - not even close to meeting that demand. Beside the REAl spot market supply is only 20 M lbs.The rest just changes hands from one buyer to another....Uraniums version of musical chairs.
CCO's purchases COULD trigger the security of supply threat as early as this year but I think US utilities will be holding off contracting until the Section 232 issue is out of the way...likely 2019. So I think price moves of significance will occur in 2019 but the real Bull will come in late 2020 when the utilities uncovered demand is high, many of the 56 under construction are connected to the grid and the number of Japanese plants restarted is in the 20 to 30 range.
And - I will reiterate - a significant factor often overlooked by analysts (because they don't understand reactor physics) is that those 56 plants need a great deal more uranium in their early years than do steady state plants of the same size and output.. It is about three times as much. So there will be a big spike in demand as fuel for 56 plants -equivalent to 168 steady state plants is purchased. That is the tidal wave about to hit this market.
The reason is that a new plant needs all of its fuel channels filled with fresh fuel that has not been in a reactor. That is the first fuel load is three times bigger than the steaady state fuel load. In the second fuel load - after it has been running for 18 months about half the fuel assemblies are changed out and after another 18 months about 1/3 of the fuel assemblies are replaced. That represents a big increase in demand for fresh fuel that is just not going to come from spot market supply.
Sorry for the long reply but the right catalyst now could spike prices upwards, in 2019 it becomes more certain and by 2020 it is a guarantee that prices will rise or supply of Uranium stops. My best guess is that by late 2020 we will be in the bull market in earnest but it certainly could start sooner than that....I will not disagree with you on that point.
The other factor I consider an important one is failure of so-called renewable energy to meet electricity supply needs. It will only need a catastrophic failure of Energiewiende in Germany (which is already retreating from this position) or lights going out in a major energy jurisdiction because of over-reliance on wind and/or solar to force public perception into the realization that only non weather dependent nuclear power can do the job consitently well enough and reliably enough without atmospheric pollution by CO2 or CO or SO2 or NOx. Interest in wind and solar will wane as it already is in Ontario where I live (recent cancellation of a wind project here) and other jurisdictions.
Those are some of the factors that will end this bear market. And when they all come together there will be more fireworks than Canada Day and the 4th July combined!!! I intend to be at that party.
Be prepared is all I can say to you. Be well prepared. This will change your life forever if you play your cards right.
Malcolm