"I think that it's entirely plausible to see uranium at US$300 in a spike,"
~Adam Rozencwajg, Managing Partner, Goehring & Rozencwajg
Adam Rozencwajg joined Charlotte McLeod of the Investing News Network for a closer look at the uranium market.
The uranium bull market is just getting started, but it could get "completely out of hand" before it's over.
"From a demand perspective, utilities are captive buyers that need to get their hands on the fuel," said Adam Rozencwajg. Meanwhile, supply is expected to remain tight for the foreseeable future.
"I think over the long term on a sustainable basis both supply and demand can probably sustain US$120 a pound, and that would be enough to bring on supply over time," he said. However, prices could spike well above that level for a brief period.
"I think that it's entirely plausible to see uranium at US$300 in a spike," Adam told the Investing News Network. "Now, that won't be sustainable, but it almost seems likely — you never want to say certain — that you're going to overshoot that US$120."
Taking a closer look at uranium market dynamics, Rozencwajg noted that demand is solid even without adding small modular reactors to the picture — while he sees them as key for the 2030s, they won't come into play before then.
"None of them make the slightest bit of difference to supply and demand dynamics between now and 2030. What you have now is a China reactor buildout story, you have an India reactor hopeful plan and you have Saudi Arabia looking to build reactors as well. And that's all you need — that's what keeps this market really tight until the end of the decade," he said.
When it comes to supply, Rozencwajg said he doesn't see any assets that can come into production in the near term.
"For right now, I think we're in a pretty good sweet spot here where there's nothing that can come online really quick, there's nothing that's waiting in the wings. All this uranium enrichment underfeeding, that's all gone. You've had SWU shortages and that whole stockpile's kind of swung the other way. Your commercial stockpiles seem to be largely depleted," he said.
For more of Adam Rozencwajg's thoughts on uranium prices, as well as supply and demand, we invite you to watch the full interview.
This interview is available below (filmed September 29, 2023).
Want to learn more from Goehring & Rozencwajg? We invite you to download or revisit our entire Q2 2023 investor research letter, available below.
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