Uranium Is Just Getting Started

quoth the raven's Photo
by quoth the raven
Monday, Oct 18, 2021 - 11:56

(Submitted by Quoth the Raven at QTR's Fringe Finance)

It has been no secret to my readers that I have been bullish on uranium. I wrote my first article on the commodity, which I had been long for months, late this summer.

Since then, uranium prices and uranium stocks have both soared. Names like Cameco and the Global X Uranium ETF are both up better than 40% in the last 3 months.

The first catalyst propelling the move has been relatively major: Sprott's uranium trust has been effectively trying to corner the market and has been buying massive sums of physical uranium. This is putting a noticeable bid under a commodity that has been illiquid and forgotten about for the last few years.

In other words, Sprott woke everyone back up.

“Uranium, the commodity used to fuel nuclear power plants, has surged to the highest level since 2015 due in part to a single fund aggressively cornering the physical market,” Bloomberg wrote a couple months ago.

Since my last piece, the fund has continued to buy uranium and now holds more than 32 million pounds of it. The fund has a total net asset value of $1.59 billion.

While the first catalyst continues to play out, the second catalyst hasn't been as major...but it's about to be.

Over the longer term, I was expected a scaled and measured adoption by major countries back into nuclear power. The benefits, I noted in my earlier piece, are immense relative to the risk.

Many market commentators, including my friends over at Doomberg and Zerohedge have both made the common sense argument that nuclear is going to wind up reining as the ESG darling and common sense solution when it comes to renewable power in the future. I put that in diagram form over the summer:

And now it’s starting to look as though that leg of my thesis could be playing out quicker than expected.

In just a short span of a month or two, five major countries - Germany, Finland, France, Poland and the UK - have all announced intentions of varying degrees to make moves towards nuclear.

The most recent and boldest of these adoptions comes from the U.K., where it was reported by FT that nuclear power will be "at the heart" of Britain's strategy for net zero carbon emissions by...(READ FULL ARTICLE HERE).


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