RE:The spot price movements in short term vs 60$/lb needed!Napalm1 wrote:
- Cameco, Orano, Kazatomprom, Peninsula Energy, ... need to buy U3O8 in the market the coming weeks/months;
Contracts will roll off before inventories run out, with three major consumers (Japan, Germany, South Korea) now out of the market and the largest consumer (the US, now so debt-handcuffed that it will never again start a large reactor project) in steady attrition, and buyers elsewhere unwilling to recontract while the spot market is awash with excess material and low prices.
An implosion point is approaching for Cameco; its realized price (only $34 in 2020) is little above spot, and when too few contracts remain they'll begin selling at a loss (they'll have no choice if contracts remain active). Cameco's big hope, its only hope really, is that spot falls a long way so that it can service remaining contracts and cover other costs.
How do I know the spot market is awash with excess material? The spot chart for the past two years tells me so.
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Napalm1 wrote:
- knowing the above, hypothetical U3O8 inventories are now less available for a transaction (Why selling U3O8 at 30$/lb now, when you know you will need to buy U3O8 back later at 60$/lb?!!)
Companies that are selling at spot today have no choice. The alternative is to exhaust cash+CE, default on debt, and be sold for parts.
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Napalm1 wrote:
Don't try to swing trade uranium stocks, because you will be taken by surprise.
Since 2015 I've made all my gains on CCO through swing trading. Every time I was "taken by surprise" it was with amusement because the price had risen beyond fundamentals on nonsense talk and gone too high, followed by price falling when the 'uranium explosion' failed to detonate. Every time this mini-cycle happens you can make money.
The 'uranium explosion' might happen. But it might not happen at all if closed-fuel-cycle plants become the standard and older designs age and are shut down. China and Russia are headed that way. The US (along with its sidekick, Canada) has decided to let its nuclear industry wither and die (the free market dictates that uranium won't be what replaces coal there -- it'll be gas, no matter what Biden says). Japan's restart is proceeding so slowly that it won't be a factor (unless something changes there).
Y'all can continue feigning knowledge, but we have little to none. What little data I can see tells me things are not about to change and I should continue in a swing-trade mindset. I started watching in 2015, and with the exception of some head-fakes from CCO and Kazatomprom, the outlook for uranium miners has been deteriorating almost the whole time.