Australian (ASX) Stock Market Forum

Uranium resurgence

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Sean K said:
Hoping uranium can do it a forth time. Might be just a matter of when.
Click to expand...

from Global Macro Update

Ed D'Agostino:
So can we maybe unpack one of your more well-known trades, sort of how you got into it, what drew you to it, how you approach a trade? And I'm thinking about uranium because you're, at least on X, formerly known as Twitter, you're sort of a legendary guy when it comes to investing in uranium. You got it right. You were in it back in ‘21. How did you get into it, and what was the setup that got your attention?

Harris Kupperman:
So I was really lucky that I played uranium the last cycle. And so, I made a lot of money the last cycle. It was unusually good to me. And so I've always had a sweet spot for uranium. But the problem is that after Fukushima there was just this excess supply, and the world had too much of it, and it pushed the price down. And, as it always happens to the commodities, I do a lot of commodity investing, when there's too much supply, the price goes down, and eventually a bunch of guys go bankrupt. They stop producing and then you have a deficit and the pricing fixes itself. Every commodity has a different cycle, and this one, it took over a decade from Fukushima until we hit bottom. Well, I guess we hit bottom a little earlier, but before you started seeing any life come into it. But in 2021, we were year three of the deficits, and so we started drawing down above-ground inventory.
But a funny thing happened in that countries that had previously said they were shutting the nuclear power plants, they all made these green commitments. And solar doesn't work when it's not sunny, and wind sometimes doesn't work when it's not windy. And they had too much intermittent power and not enough base load, and they realized that if they were going to continue to phase out their coal power plants, they needed to keep the nuclear on. And so we had all these plants that were supposed to be shutting down, nuclear power plants, that instead got postponements where they were allowed to stay on longer. The Japanese and Koreans decided they were going to turn plants back on. The French decided that they were going to go full in on nuclear. And the US, we did some of the same. And so you had this weird situation where the market was supposed to be balanced based on the current amount of
production or maybe a slight deficit, and instead the deficit became very, very large because the demand for uranium went up much more rapidly that the supply could.
And even today, three years later, the supply response has really been slow because it's really hard to build a mine. And there's a bunch of existing mines that are [inaudible 00:14:51], but even those take a while to come online. But the real catalyst was that an entity called Sprott Physical Uranium Trust, it was launched. It's a Canadian entity. We're shareholders for disclosure. And it was issuing shares and buying pounds, and it sequestered now over 60 million pounds of physical uranium. And that helped clear up a lot of the above-ground inventories that now the deficit can impact the price, and it has impacted the price. When I first started buying, the price of uranium was in the low thirties. Today, it's in the mid-eighties. It got as high as 105 or so. So it's been an okay trade for me. I mean, I've had better trades. I've had worse trades. But it's done well, and I think it's going to continue to do well. And I think at the end of this cycle, as usually happens, there'll be an explosion higher in price.
Usually near the end of these sorts of things, there's a panic and the price goes crazy, and that's what you need to incentivize governments around the world to supply the uranium. There's plenty of uranium. It's not like the power's going to go out, but you're going to need to take this nuclear power out of some other thing like an aircraft carrier. And to do that, you need the price to go crazy, and you need the guys who had this spare governmental uranium to say, “Okay, we'll give it to the commercial market and kind of bridge the gap.” And so we're not there yet. And when we start getting there, that's when I sell. That's been good.

My understanding is we're not even close to the price point yet for spot uranium where it is economical to restart a lot of the mothballed mines, at least the ones that are in North America.

Harris Kupperman:
Sort of, not really. The thing is that these mines, they produced a lot of them a decade ago, and so they were... at today's price of, say, 85, they'd be very profitable. But it's been a decade of inflation, and it's hard to say what the right price is. At the same time, permits lapsed, and there's really not a lot of capital to the industry. I mean, there's a huge uranium bubble going on in the juniors, but despite that bubble, and it really is a bubble, there's not a lot of capital available, which is odd, so you're not seeing a lot of these restarts. I think you'll see that eventually in this cycle. That's how the cycle ends, but that's not now. We're kind of in the mid-stride of the cycle.

Ed D'Agostino:
What do you think about the processing side? Because my understanding is we have very little, if any, processing as well, a refinement of uranium. So we were essentially relying on Russia for the refining.

Harris Kupperman:
We are, and it's very stupid. We should be able to... I mean, it's about 15% of our electricity in America. We should be able to do this ourselves. There's a couple steps along the way. You have to take uranium and turn it into UF-6, then you have to enrich it, then you have to fabricate it into fuel rods. We're short on all of this stuff. The Russians do it cheaper, they do it better, and we closed our plants. Much of America, we outsourced all this stuff, which may have made good financial sense for a bunch of public companies, but it doesn't make good national security sense. And now we're fully at the mercy of the Russians. If they stop supplying us with enriched uranium, we're going to have a real big problem here. But even if you want to build an enrichment facility, it takes years. So there's bottlenecks. And that's one of the reasons actually that the price of uranium hasn't gone up more.
No one's out there buying U3O8, raw uranium, because there's a shortage right now in terms of enrichment and also in terms of UF-6 conversion. So you're not going to buy the initial components if you can't actually turn it into a fuel rod. So because of that supply chain, it's all sort of backed up and you haven't really pulled forward some of that demand. So I think as these things get solved, you'll see the demand for physical uranium, the thing that I own, also grow.
 
Last edited:
Dona Ferentes said:
from Global Macro Update

Ed D'Agostino:
So can we maybe unpack one of your more well-known trades, sort of how you got into it, what drew you to it, how you approach a trade? And I'm thinking about uranium because you're, at least on X, formerly known as Twitter, you're sort of a legendary guy when it comes to investing in uranium. You got it right. You were in it back in ‘21. How did you get into it, and what was the setup that got your attention?

Harris Kupperman:
So I was really lucky that I played uranium the last cycle. And so, I made a lot of money the last cycle. It was unusually good to me. And so I've always had a sweet spot for uranium. But the problem is that after Fukushima there was just this excess supply, and the world had too much of it, and it pushed the price down. And, as it always happens to the commodities, I do a lot of commodity investing, when there's too much supply, the price goes down, and eventually a bunch of guys go bankrupt. They stop producing and then you have a deficit and the pricing fixes itself. Every commodity has a different cycle, and this one, it took over a decade from Fukushima until we hit bottom. Well, I guess we hit bottom a little earlier, but before you started seeing any life come into it. But in 2021, we were year three of the deficits, and so we started drawing down above-ground inventory.
But a funny thing happened in that countries that had previously said they were shutting the nuclear power plants, they all made these green commitments. And solar doesn't work when it's not sunny, and wind sometimes doesn't work when it's not windy. And they had too much intermittent power and not enough base load, and they realized that if they were going to continue to phase out their coal power plants, they needed to keep the nuclear on. And so we had all these plants that were supposed to be shutting down, nuclear power plants, that instead got postponements where they were allowed to stay on longer. The Japanese and Koreans decided they were going to turn plants back on. The French decided that they were going to go full in on nuclear. And the US, we did some of the same. And so you had this weird situation where the market was supposed to be balanced based on the current amount of
production or maybe a slight deficit, and instead the deficit became very, very large because the demand for uranium went up much more rapidly that the supply could.
And even today, three years later, the supply response has really been slow because it's really hard to build a mine. And there's a bunch of existing mines that are [inaudible 00:14:51], but even those take a while to come online. But the real catalyst was that an entity called Sprott Physical Uranium Trust, it was launched. It's a Canadian entity. We're shareholders for disclosure. And it was issuing shares and buying pounds, and it sequestered now over 60 million pounds of physical uranium. And that helped clear up a lot of the above-ground inventories that now the deficit can impact the price, and it has impacted the price. When I first started buying, the price of uranium was in the low thirties. Today, it's in the mid-eighties. It got as high as 105 or so. So it's been an okay trade for me. I mean, I've had better trades. I've had worse trades. But it's done well, and I think it's going to continue to do well. And I think at the end of this cycle, as usually happens, there'll be an explosion higher in price.
Usually near the end of these sorts of things, there's a panic and the price goes crazy, and that's what you need to incentivize governments around the world to supply the uranium. There's plenty of uranium. It's not like the power's going to go out, but you're going to need to take this nuclear power out of some other thing like an aircraft carrier. And to do that, you need the price to go crazy, and you need the guys who had this spare governmental uranium to say, “Okay, we'll give it to the commercial market and kind of bridge the gap.” And so we're not there yet. And when we start getting there, that's when I sell. That's been good.

My understanding is we're not even close to the price point yet for spot uranium where it is economical to restart a lot of the mothballed mines, at least the ones that are in North America.

Harris Kupperman:
Sort of, not really. The thing is that these mines, they produced a lot of them a decade ago, and so they were... at today's price of, say, 85, they'd be very profitable. But it's been a decade of inflation, and it's hard to say what the right price is. At the same time, permits lapsed, and there's really not a lot of capital to the industry. I mean, there's a huge uranium bubble going on in the juniors, but despite that bubble, and it really is a bubble, there's not a lot of capital available, which is odd, so you're not seeing a lot of these restarts. I think you'll see that eventually in this cycle. That's how the cycle ends, but that's not now. We're kind of in the mid-stride of the cycle.

Ed D'Agostino:
What do you think about the processing side? Because my understanding is we have very little, if any, processing as well, a refinement of uranium. So we were essentially relying on Russia for the refining.

Harris Kupperman:
We are, and it's very stupid. We should be able to... I mean, it's about 15% of our electricity in America. We should be able to do this ourselves. There's a couple steps along the way. You have to take uranium and turn it into UF-6, then you have to enrich it, then you have to fabricate it into fuel rods. We're short on all of this stuff. The Russians do it cheaper, they do it better, and we closed our plants. Much of America, we outsourced all this stuff, which may have made good financial sense for a bunch of public companies, but it doesn't make good national security sense. And now we're fully at the mercy of the Russians. If they stop supplying us with enriched uranium, we're going to have a real big problem here. But even if you want to build an enrichment facility, it takes years. So there's bottlenecks. And that's one of the reasons actually that the price of uranium hasn't gone up more.
No one's out there buying U3O8, raw uranium, because there's a shortage right now in terms of enrichment and also in terms of UF-6 conversion. So you're not going to buy the initial components if you can't actually turn it into a fuel rod. So because of that supply chain, it's all sort of backed up and you haven't really pulled forward some of that demand. So I think as these things get solved, you'll see the demand for physical uranium, the thing that I own, also grow.
Click to expand...
So on short, our western uranium price is fulling reliant on the Russia/west relationship..does Russia process mote for the west or not...
We could reach the situation where uranium price could itself collapse while in dire shortage in power station ready fuel..
A bit like cattle price ridiculously low, with steaks at Coles extremely dear, during COVID due to abattoir issues...
The abattoir for uranium being the Ukrainian conflict..a not so pushed analogy
 
qldfrog said:
So on short, our western uranium price is fulling reliant on the Russia/west relationship..does Russia process mote for the west or not...
We could reach the situation where uranium price could itself collapse while in dire shortage in power station ready fuel..
A bit like cattle price ridiculously low, with steaks at Coles extremely dear, during COVID due to abattoir issues...
The abattoir for uranium being the Ukrainian conflict..a not so pushed analogy
Click to expand...
There is a type of uranium fuel that is needed for the newer 4th Gen reactors such as the Terra Power reactor that Gates just started by building in Wyoming that mainly is refined by Russia and China, basically it’s enriched to 20% U235 rather than the standard 5%.

But that just requires upgraded production facilities to be built in the west, which the USA government has just kick started.

Longer term though gates plans to run his nuclear plants on waste from older reactors using the travelling wave enrichment process, because he say a there is already enough uranium waste in the USA to power 100% of American electrical demand for 600 years.

 
If Australia goes Nuclear we need these types of 4th gen reactors that Bill Gates is building, they are perfect for backing up renewables, where as older reactors have to be run 24 hours a day.

 
Tyre Kicker said:
We’re a bit slow in the Great Aus… the Gates style nuclear plants are a no brainer.
Click to expand...
Agreed, it would be great for Australia to have these to back up renewables, as a Side note, that nuclear power plant that gates is building is on a site owned by Warren Buffet’s Berkshire Hathaway energy business, it’s taking the place of a coal plant that is scheduled to shut down later this decade.

So if you Buy Berkshire Hathaway shares, you own part of the power grid and utility that will be accepting the power from this plant, and Berkshire Hathaway energy is looking to expand the roll out of this tech to back up their huge wind and solar resources.
 
qldfrog said:
When they will exist, not in blueprints
Click to expand...
The Terrapower Nuclear plant is literally under construction right now, they broke ground 2 weeks ago, due to start electricity production in 2030. And the plan to break ground on about 4 more before that first is completed.

Here is a good video about the benefits of the new designed plants bs older ones

 
qldfrog said:
When they will exist, not in blueprints
Click to expand...
It’s a fait accompli in the US now.

Gates claims cost is about 4 billion to complete. An absolute bargain for a 60 plus year plant life. Maybe 90 years.

The smart country is stuck with Blackout Bowen in charge of our future electricity supply. Yikes.
 
Tyre Kicker said:
It’s a fait accompli in the US now.

Gates claims cost is about 4 billion to complete. An absolute bargain for a 60 plus year plant life. Maybe 90 years.

The smart country is stuck with Blackout Bowen in charge of our future electricity supply. Yikes.
Click to expand...
just add a look, the fait accompli is 2030 LOL
1720066782790.png
terrapower is Gates's nuclear plant company
I also noted they said in one comment..sodium is safer than water..I had a good laugh/cry on some western level in physics:

yeap...but we will know better, she will be right mate
 
an American view ... from Global Macro Update


Why Are We Still Relying on Russia?​

By Ed D'Agostino | July 23, 2024


The appetite for nuclear energy is growing fast. Here in the US, most adults now favor expanding our nuclear power capabilities because it’s a great alternative to fossil fuels. Unlike wind or solar, nuclear provides energy around the clock. So, why haven’t we built more nuclear power plants?
It’s simple: red tape. It takes around 16 years to get a nuclear power plant up and running in the US. Globally, it’s closer to 6‒8 years.
Hopefully, that is starting to change. The ADVANCE Act, which was signed into law earlier this month, moved through Congress relatively fast thanks to bipartisan support. The Act updates the Nuclear Regulatory Commission’s framework for bringing new nuclear technologies online faster and cheaper, and for extending the lives of the nation’s 94 operable reactors.
Nuclear power accounted for 9% of US energy consumption last year. But with energy demand set to reach new highs this year and next, the US needs more power generation. Energy-hungry data centers and an increasing industrial base mean demand for electricity will continue to grow.
Billionaire tech titans are funding new types of advanced nuclear reactors. TerraPower, founded by Bill Gates, is building its first nuclear reactor in Wyoming with the help of up to $2 billion in federal funding. It should come online by 2030.
Jeff Bezos is participating, too, financially backing Canadian nuclear power company General Fusion, which aims to bring “commercial fusion energy to the grid by the 2030s.” And over at Amazon, the company he founded has purchased a massive, $650 million nuclear-powered data center campus to help support Amazon Web Services.
OpenAI CEO Sam Altman is the chairman of Oklo, a nuclear power tech firm developing fission reactors.

Building Nuclear Resiliency​

One surprising weak link in our nuclear renaissance is the source of a critical resource: uranium.
Uranium is the key input for nuclear power. Yet most of the uranium purchased by US nuclear power plant operators is imported.
​
In 2023, less than 5% of the uranium fueling US reactors came from US sources. That wouldn’t pose such a massive national security risk if a greater share came from Canada and Australia, which do supply a fair amount. The risk comes from relying on Russia, Kazakhstan, and Uzbekistan for a combined 41.8%.
CHART_1_20240723_GMU.png​
During our interview last September, Uranium Energy Corp. CEO Amir Adnani said uranium posed “the most fundamental supply deficit of any commodity anywhere on the planet.” Here’s Amir:
“The reality is we still have a fundamental supply deficit both globally and in the US when it comes to uranium. And that, again, doesn’t include the needs of advanced and small reactors. That doesn’t include the needs of 108 microreactors that are powering the nuclear Navy. Every aircraft carrier and submarine is powered by uranium. And we’re not talking about to wage war. We’re talking about just the regular ability to roam the international waters. You look at the needs of NASA. Space travel is powered by microreactors that are powered by uranium.…
“We are facing a serious crisis when it comes to the lack of domestic production in the US. Thankfully, I think people are starting to get it. Washington’s starting to get it.”

Part of “starting to get it” is the US strategic uranium reserve—the US Department of Energy began awarding contracts to build a stockpile in 2022.
The US has uranium in the ground. At the end of 2023 domestic uranium reserves were estimated at 446 million pounds. But uranium is cheaper to produce elsewhere. And despite a substantial runup last year, uranium prices would need to stay higher for longer to induce more domestic production.
CHART_2_20240723_GMU.png​
This is a prime example of the “resiliency-driven inflation” I have been predicting. The US needs to become more resilient when it comes to accessing critical inputs. Uranium is an obvious example. Prices must be higher to support the higher costs of domestic mining and refining. In the end, we may have no choice. Just as China is working hard to secure its own sources of advanced microchips, we (the collective West) should be working hard to secure our own sources of the critical inputs and commodities necessary to support our economy.

END
 
Recycling the 70 years of used uranium currently in storage could develop into a source of fuel that would dwarf the current supply from mines.

 
Uranium having a cracker go on US markets right now.
Movement noticed last trading session, however it didn't correspond over to AUS markets today.
Perhaps Monday will be a different story.
More observations required.

On US markets, (first 2 charts)
UEC currently up ~13%
URA currently up ~7%

Last chart Sprotts miners from Germany, market closed. Notice the huge volume.

Screenshot_20240824-020918.pngScreenshot_20240824-020847.pngScreenshot_20240824-020826.png

Might be of interest @Sean K aka Mr Santorini
 
frugal.rock said:
Uranium having a cracker go on US markets right now.
Movement noticed last trading session, however it didn't correspond over to AUS markets today.
Perhaps Monday will be a different story.
More observations required.

On US markets, (first 2 charts)
UEC currently up ~13%
URA currently up ~7%

Last chart Sprotts miners from Germany, market closed. Notice the huge volume.

View attachment 183045View attachment 183046View attachment 183047

Might be of interest @Sean K aka Mr Santorini
Click to expand...

Worlds largest producer, Kazataprom, has lowered its 2025 production forecast by approx 17%.

They produce about 20% of world supply.

ca.finance.yahoo.com

Cameco and Canadian uranium peers rally as world's top producer cuts 2025 target

Earlier this year, Toronto-based Sprott Asset Management predicted the short supply could support uranium prices above US$100 per pound.
ca.finance.yahoo.com ca.finance.yahoo.com
 

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