Challenge Accepted:  Convince Me in 15 Minutes That Uranium is in a Bull Market.

Joining the engaging podcast, Convince Me in 15 Minutes, Adam Rozencwajg makes a compelling argument for the promising investment potential of uranium based on current supply-demand dynamics. Delving into the historical context of uranium stockpiles, he sheds light on the unprecedented supply shortage that sets the stage for a bullish market.

Convince Me in 15 Minutes is a podcast that delves into the intricate concepts, theories, and philosophies of finance, investing, and wealth management within a concise 15-minute timeframe (with room for insightful questions from hosts Keith Thompson and Luke Theeuwes).

Don't miss out on this enlightening interview – tune in to gain valuable insights.

Interview was released on February 28, 2024.

[01:54] Historically, there has been a uranium surplus, but recent shifts in supply-demand dynamics have led to a deficit, driving prices upward.

[04:28] Government stockpiles of uranium were depleted by the mid-2000s, causing a significant price increase from $9 to $150, only to fall again after Fukushima.

[05:22] The current uranium market faces a primary deficit, with reactor demand exceeding mine supply and commercial stockpiles exhausted.

[06:18] Nuclear fuel demand is inelastic, meaning buyers are willing to pay high prices to keep reactors running, ensuring continued demand.

[10:52] China and India are leading new reactor construction, while Western countries extend the lifespan of existing reactors, increasing uranium demand.

[12:29] Small modular reactors (SMRs) represent future demand potential, with designs aiming for cost-effectiveness and energy efficiency.

[19:33]  Currently, primary uranium production is dominated by a few major players like Cameco and Kazatomprom, while the US is gradually reentering the market with existing operations.

[20:15] Despite the expected production from existing facilities in 2024, it won't significantly impact the uranium market due to insufficient economic viability.

[20:58] Kazakhstan's unexpected announcement of reduced production contradicts previous claims, leading to a spike in uranium prices, highlighting market volatility

[22:23] New Canadian mines like NextGen's Arrow Project and Dennison's Wheeler River Project will contribute to uranium supply, but they won't be operational before 2028-2030.

[23:20] The speaker's portfolio is 25% invested in uranium stocks, including Kazatomprom, Cameco, NextGen, and Dennison, emphasizing confidence in the uranium sector.

[24:18]: Cameco's decision to shut down mines to purchase cheaper spot material showcased a savvy financial move during a period of low uranium prices.

[25:56]  Limited availability of uranium spot material indicates a tighter market, with significant pressure on Chinese buyers to secure fuel material for reactors.

[27:47]  Uranium market dynamics have shifted from surplus to deficit, with declining inventories leading to price reactions, marking a unique phase in the market cycle.

[29:39]  The speaker advises considering commodities like uranium as long-term diversifiers, emphasizing their cyclical nature and the importance of timing in investment decisions.

Want to learn more from Goehring & Rozencwajg?
We invite you to download or revisit our Q4 2023 investor research letter, available below.   

Registration with the SEC should not be construed as an endorsement or an indicator of investment skill, acumen or experience. Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal. Historical performance is not indicative of any specific investment or future results. Investment process, strategies, philosophies, portfolio composition and allocations, security selection criteria and other parameters are current as of the date indicated and are subject to change without prior notice. This communication is distributed for informational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Nothing in this communication is intended to be or should be construed as individualized investment advice. All content is of a general nature and solely for educational, informational and illustrative purposes. This communication may include opinions and forward-looking statements. All statements other than statements of historical fact are opinions and/or forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”). Although we believe that the beliefs and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such beliefs and expectations will prove to be correct. Various factors could cause actual results or performance to differ materially from those discussed in such forward-looking statements. All expressions of opinion are subject to change. You are cautioned not to place undue reliance on these forward-looking statements. Any dated information is published as of its date only. Dated and forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any dated or forward-looking statements. Any references to outside data, opinions or content are listed for informational purposes only and have not been independently verified for accuracy by the Adviser. Third-party views, opinions or forecasts do not necessarily reflect those of the Adviser or its employees. Unless stated otherwise, any mention of specific securities or investments is for illustrative purposes only. Adviser’s clients may or may not hold the securities discussed in their portfolios. Adviser makes no representations that any of the securities discussed have been or will be profitable. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.