Uranium prices have increased over 10% in the last week due to fears about supply issues coming from the unrest in Kazakhstan, where about 42% of the annual uranium *production* comes from, thought over half of that is sold to China, according to Toktar Turbay.
Toktay said, in a recent interview with The Northern Miner that, “China has accumulated uranium inventories that can cover 11 to 12 years of uranium demand”.
So, could this be a big “nothing burger” for your uranium portfolio? Chances are it might cause short-term volatility, but as long as you’re not 100% all in on one stock, you’d likely be fine.
You all know the story; LPG prices have gone up quite a lot in Kazakhstan, that got a lot of people protesting on the streets across the country, hundreds got injured, dozens died. Not a beautiful picture.
Is this bullish or bearish for uranium? It is what you make it to be.
Long-term, I don’t think this matters too much, but then again I’m not in Kazakhstan and my pea brain knows as much about the situation as it does about rocket science – pretty much nothing.
This is what Trading Economics says the uranium price chart looks like after news of the Kazakh protest have hit the market, and I don’t care.
The fact of the matter is the same it was in 2018: the price of uranium is too low for commercial enterprises in the West to make money on it, and it should go up. Like Rick Rule told me: the price of something that should, and could go up, will go up, no matter what.
Even though companies like Cameco (NYSE: CCJ) & Energy Fuels (NYSE: UUUU) have already grabbed the opportunity for a quick marketing stunt and have said that they will ramp up production as quickly as possible if the Kazakh supply get hit, I don’t expect this to have any long-term effects on the market.
In times as these, I’m reminded of the lyrics of a song by Cat Stevens, called “Father & Son”:
“It’s not time to make a change
Just relax, take it easy
You’re still young, that’s your fault
There’s so much you have to know”
This perfectly describes me and my portfolio strategy going forward. I think I’ve diversified enough and hold positions in companies that will do well over the 3 to 5-year period, regardless of what happens in Kazakhstan in the next 3 to 5 weeks.
What the situation does do, though, is that it brings more and more attention to the uranium market. Utilities will be watching this closely, of course.
I do plan on following this closely and reporting more often on it, if there is something of material importance.