As fantastic as 2021 was for our bullish uranium thesis, we believe the evidence points to the uranium market reaching a dramatic crescendo in 2022 lasting through at least 2023. To understand why our confidence in both the outcome and the timing is high, we need to take a journey through three charts.
Uranium is an unusual commodity to analyze because the majority is purchased under long term contracts by the utilities who operate nuclear power plants. Put another way, the demand that sets the price isn’t simply the volume that’s consumed that year, it’s the volume that utilities put under contract during the year and the supply available in those future years. The following chart illustrates a very depressed demand environment when demand is defined as contracted volume as opposed to consumption. No alt text provided for this image Given the very low level of contracted demand since 2012, […]
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