Asset Classes

Metal

Radioactive chemical element that is primarily used in nuclear power generation and military weapons.

More About Uranium

  • Two primary uses:  Civilian Power Plants & Defense
  • As of 2018, the USA imports over 90% of its uranium
    • This could be a security risk as this is used for nuclear power reactors and nuclear powered navy ships
    • Much of the USA's imported uranium comes from Russia, Kazakhastan, Australia and Canada
    • Uranium prices in the United states could jump if laws/restrictions/tariffs are put in place to spur US production
  • Uranium Junior Mining is a Relatively Small Industry
    • ~ 5 Uranium mining companies in the late 1990s
    • Grew to roughly 500 during the last bull market in Uranium
    • ~20-25 Uranium mining companies in the late 2010s

Uranium is a Politicized Metal
  • very political & emmotion commodity
  • nuclear power is regulated, so regulation can hugely impact uranium demand
  • emotions + politcs = high volatility

Nuclear Scares & Disaster Can Negatively Impact Uranium Prices
  • These events cause publish disfavor and protests
  • Can even cause closure of nuclear plants and/or cancellation of new nuclear project
  • Examples include:
    • Three Mile Island
    • Chernobyl
  • This results in reduced demand and a fall in prices


Uranium Price History
  • Uranium prices tend to follow cyclical patterns
    • Rise very high when nuclear power is in favor
    • Fall below production costs when nuclear power is out of favor
  • 20 year bear market from early 1980s to early 2000s
  • Bull market till mid 2000s
  • Bear market from mid 2000s to current (2018)
  • Setup for a potential price increase in 2018 & beyond

    • The number of uranium miners is shrinking
    • Globally the number of nuclear power plants is increaseing