Looks like Uranium stocks might be ready to spring back into life.
Article.....
http://www.iht.com/articles/2008/06/...ss/uranium.php
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Looks like Uranium stocks might be ready to spring back into life.
Article.....
http://www.iht.com/articles/2008/06/...ss/uranium.php
I'm wondering if some Uranium fans might be able to educate me a bit.
I've been following Uranium prices for a few years....and I reckon we've seen bottom(or near bottom) based on the following reasons:
*Massive future energy demands will strain existing and future uranium supply
*Global Warming advocates will be knowingly or unknowingly supporting a push for increased nuclear power infrastructure
*Supplies of nuclear weapons cores to be recycled for commercial power use are finite
*Massive inflation will see uranium mining costs accelerate as well as commercial nuclear power plant construction costs to accelerate as well.
*Due to a number of factors, I am thinking there is a strong possibility of a "superspike" in Uranium prices over the next 10 years or so.
These are just my personal feelings on the issue, and while I'm quite comfortable in investing in openly traded commodities such as oil, natural gas, gold, and silver...I'm a bit reluctant to jump in head first without performing sufficient due diligence.
Is it correct to say that it is impossible to purchase uranium futures contracts as a private person as I can with Oil?
That is my assumption, and assuming I am correct, does anyone know of any investments that most closely mimick Uranium prices, that remove the risk typically associated with mining companies(such as poor management and mining cost inflation risk)?
So basically, I'm a big fan of uranium at it's current price levels....I'm just a bit reluctant to place bets on uranium mining management or uranium mining cost blowouts.
If there are no investments that directly or closely mimick Uranium, what would be the Uranium equivalent of a NZ Dairy Farm :) .......where costs increase......but at a far lesser rate than underlying commodity price increases?
Not looking for anyone to do my homework for me, just looking to cut through some of the "noise".
Cheers!
Hey Lake, do yu have a link to uranium prices and graphs?
I agree with you and want some exposure to uranium. Now, the hard part is to pick a few good uranium stocks to invest in.
"Spot price" <----Not sure how exactly it's calculated as I believe Uranium trades not openly but by private treaty
http://www.uxc.com/review/uxc_Prices.aspx
And here's a chart from the same site:
http://www.uxc.com/review/uxc_g_2yr-price.html
That's all I've been able to find thus far....yeah I'm thinking about investing a good bit more time in finding something that's meets my "cash-like commodity-currency" criteria...albeit with Uranium and how it seems to trade it could be high risk/VERY high reward.....which destroys it as a strong prospect for a short-to medium term cash substitute.......but it certainly seems to be making the hairs on the back of my neck stand up in terms of a "invest and forget for a decade" approach......just my 0.02c
pretty sure theres a uranium ETF
I think they invest in yellow cake
That would give you direct exposure to the uranium price
Another Uranium ETF to raise capital following UPC:TSX
http://www.uraniumparticipation.com/...vID=114&lang=1
---------------------------------------------
Uranium quasi-ETF to raise cash for uranium
purchase: Nufcor Uranium Ltd. (NUL), managed by
London-based trading group Nufcor International (recently
acquired by US utility Constellation Energy), has filed a
prospectus for the sale of an unspecified number of new
shares with at least 90% of the proceeds to be used to
finance the acquisition of uranium.
While the amount of uranium to be purchased by NUL is
still undetermined (and will largely be determined by
investor appetite), we have heard speculation that the
volume of uranium purchased may well be at least as big
as the raising completed by Uranium Participation
Corporation (UPC, the other uranium ETF) earlier this
year, which was for 900,000lbs at just over $70/lb.
I saw an interesting report out from Macquarie this morning on the Uranium industry.
Basically they are forecasting a market deficit in FY10 (12 months time), which will drive some big gains in the spot price.
[FONT='Arial','sans-serif']Uranium market balance to 2012
[FONT='Arial','sans-serif']Tonnes U 2007 2008F 2009F 2010F 2011F 2012F
[FONT='Arial','sans-serif']---Total Primary 41279 45352 50332 54883 59843 66409[/font]
[FONT='Arial','sans-serif']---Other Supply 19601 19860 20279 18598 16750 16673[/font]
[FONT='Arial','sans-serif']Total Supply 60880 65212 70610 73481 76593 83083[/font]
[FONT='Arial','sans-serif']% Change YoY 0.0 7.1 8.3 4.1 4.2 8.5[/font]
[FONT='Arial','sans-serif']Total Reactor[/font]
[FONT='Arial','sans-serif']Requirements 66,145 65,685 70,256 74,145 78,635 87,496[/font]
[FONT='Arial','sans-serif']% Change YoY 1.6 -0.7 7.0 5.5 6.1 11.3[/font]
[FONT='Arial','sans-serif']Balance -5,265 105 354 -664 -2,042 -4,413[/font]
[FONT='Arial','sans-serif']Balance including[/font]
[FONT='Arial','sans-serif']08/09 ETF buying -665 -416 -664 -2,042 -4,413[/font]
[FONT='Arial','sans-serif']Spot Price ($/lb) 99 65 60 80 90 90[/font]
[FONT='Arial','sans-serif']Surplus/deficit[/font]
[FONT='Arial','sans-serif']as % market -8% 0% -1% -1% -3% -5%[/font]
[FONT='Arial','sans-serif']Sources: Macquarie research, WNA, UxC, July 2008
Short-term outlook for spot price and market: We think Nufcor’s capital raising for the purpose of buying uranium is likely to result in some upward pressure on spot prices in the coming months, together with general coal and oil price-related investor interest in the space.
However, we are wary that reactors are generally well covered (European reactors actually built stocks in 2006/07) and that our supply/demand data (see table below) indicates that the market is likely to be roughly in balance in 2008/09, so any rally in the spot price is likely to be contained and perhaps even only temporary (unless it is driven by some unexpected supply shock).
Further out, we are confident of the market deficit in 2011/12: We have received some industry feedback suggesting our demand figures are too high. Having reviewed the situation we would re-iterate that we are comfortable with our reactor build forecasts, particularly those which impact the 2010–2012 time frame for uranium demand (ie, our assumption is that uranium for use in initial cores is ordered 3–4 years in advance of scheduled commissioning of new reactors).
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You can see from the market suppply info detailed above the very real correlation between market deficit and high spot prices (ie 2007) and market excess and low spot prices (2008).
There was also a feature article in the AFR today which said that "those close to the uranium sector say there is a window of between six to 12 months before a likely structural shift in pricing. It will come from the need of the reactors being planned to lock in long-term supply contracts to become viable." - which pretty much is what Macquarie's analysis is suggesting.
Bullseye! I was just looking through that the other day :)
From what I can find this looks like the closest thing to an easily tradeable financial instrument that most closely mimicks the underlying Uranium commodity.
Approx 50% off of its recent year crazy high........In my amateurish opinion, I think TSE:U has somewhat limited downside potential from here, but a reasonably good chance of a 2-4x upside over the next 5+ years....plus I like the benefit of diversification into an energy rich booming Loonie.
Just my 0.02c
Macquarie latest Uranium outlook:
The uranium spot price has increased to $63.25/lb, up $6.25/lb from its low of $57/lb last month. The move has been driven primarily by investor demand, though there have been a few small purchases by utilities. We continue to believe spot prices will be strongly supported in the short term (Nufcor raising, potential US/India deal, high coal and oil prices stoking investor interest), though fundamentally the underlying uranium market is looser than it was last year (and roughly in balance), as reflected in ceilings starting to enter into new long-term contract negotiations.