Macro View for Uranium is very compellingThe only real unknown I see with an investment in Uranium suppliers is the timing of it all.
It’s very simple. Right now the Uranium Market is undersupplied. It has been undersupplied for a couple of years now though in 2020 Covid really accelerated the process. This under supply will grow as demand trend ups (new reactors) and supply down (mine attrition). The distance between supply and demand will grow as time passes unless one thing happens and that’s a higher price.
The utilities need uranium because it is the fundamental fuel for an electrical nuclear generation station. Literally a lack of supply will cause the lights to go out.
I'm sure the utilities are very reluctant to pay up for Uranium now after a number of years of such low prices. That is the inertia we currently see. At the same time they can figure things out. Uranium is not the main cost of generating electricity this way. The original plant costs (and ongoing financing) with maintenance and labour are bigger costs. The better strategic decision is to pay higher price to guarantee supply. This will inevitably occur. The only question is when. I think one big contract needs to get done and the others will come fast after because like I said there is now a supply shortage for the amount of uranium needed. Utilities know this two though right now they are playing poker.
One "bonus" wildcard is that Uranium could catch investor’s eye’s if it becomes known as a carbon free fuel. Where I am the winter has been very mild. The warmest I ever remember. We have to get off coal and fast - thats a fact.