Justin Huhn – Part 7 Of Nuclear Fuels Demand And Supply Factors – Pro Tips On Investing In Uranium Stocks
The KE ReportShow Notes
Justin Huhn, Founder and Publisher of the Uranium Insider, joins us for yet another very comprehensive macro update on the supply and demand fundamentals for uranium and the nuclear fuel sector. We discuss the primary investment case for the uranium sector contrasted against the flashy headlines of the last 2 years around the secondary demand from AI datacenters and small modular reactors (SMRs). Then we dive into how the longer-term contracting cycle is setting up with utility companies, different bottlenecks in the nuclear fuel cycle, and how he is positioning in the uranium equities that feed the front-end of that supply chain.
Key topics of discussion:
We start off reviewing the Primary Demand drivers for uranium from the existing global fleet of nuclear reactors, which is augmented by the many reactor life extensions and restarts, as well as all the new reactors coming online over the next decade that are under construction or planned. The investing case for uranium bulls is compelling even with conservative modeling on this primary demand out for the next 5-10 years.
Next we layer on the various aspects of Secondary Demand that are harder to model, but will definitely have an additive effect on overall global uranium demand:
Sovereign stockpiles and strategic reserves from hedgefunds Utility companies inventory stockpiles Miscellaneous demand from Small Modular Reactors (SMRs), military, etc…
Next we transition over the supply side of the equation focusing on the uranium mining companies. We’ve seen a flurry of news the last couple years out of the U308 producers, many of which have been struggling to ramp up production.
Justin unpacks his outlook on mined supply from Kazatomprom, the largest uranium swing producer in Kazakhstan, the slow ramp up of Uzbekistan production, guidance last year from Canadian senior uranium producer Cameco (CCO.V) (CCJ), African producer Paladin, and the slow but steady ramp up of US producers. Each country and the producing entities have had a series of setbacks and challenges to hit their annual guidance, which has kept supply and inventories tight.
Next we point out that large development projects in the Athabasca Basin of Canada, like the Phoenix Project held by Denison Mines (TSX: DML) (NYSE: DNN), and in specific the importance of the Arrow Project from NexGen Energy (TSX: NXE) (NYSE: NXE), seeing their production timelines get pushed back to 2030 or later. There is very little new supply coming online globally, with the exception of some smaller production out of the US, Namibia, and Australian producers. All of this points to a much more constrained output from global uranium producers, even in face of growing uranium demand.
Justin weighs in on the importance of seeing more developers and explorers move their projects forward, and that the exploration stocks in particular have been left for dead by investors and represent compelling value propositions in this current environment.
Click here to visit the Uranium Insider website.
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