Uranium breakout
Let's get physical
Dear friends,
Some of you heard me talk (ok, brag…) about my physical Uranium exposure in the last 18 months. With a breakout in spot Uranium prices, not much mainstream media coverage and an accessible way to trade the thesis, I thought I would finally share that note now or keep in my drafts for ever.
After having postponed it for so long (shame on me), it is finally going to be shorter than the initially planned, I’m too busy for longer, but I hope you can enjoy it nonetheless.
The thesis:
Rising Demand and Environmental Shifts:
Uranium's key role in generating clean energy has made it essential to meet global climate goals.
Many countries, especially in Europe, are re-embracing nuclear power, causing increased demand for uranium.
There's a resurgence in nuclear energy interest, even in Germany, which once shunned it post-Fukushima.
New technological developments are making nuclear energy more efficient and safer, solidifying its role in the future energy mix.
Supply Chain and Production Hurdles:
A decade of underinvestment has led to decreased uranium supply.
Rising political instability in major uranium-producing regions poses risks to steady supply. (Kazakhstan, Niger…)
Regulatory pressures and lack of investment have halted the opening of new mines, causing supply limitations.
Existing uranium stockpiles are being consumed, which might lead to scarcity in the near future.
The squeeze (yes, again):
Long term Uranium spot price:
A large discrepancy is predicted between uranium supply and demand in 2024, with a potential deficit of around 50 million pounds.
Most professionals in the industry are not recognizing or responding to this looming supply squeeze.
The industry is currently exhibiting signs of complacency, “price can’t go much higher” without providing any argument.
While uranium is plentiful on earth, there's an impending gap period where increasing deficits will surpass production capabilities.
This may lead to a significant super-spike in uranium prices, beyond the current predictions or expectations of many industry professionals.
The trade:
long Physical uranium: U-UN.TO / official website
Disclaimer
I’ve been long since Oct 2021 and:
- up +40.10% so far on Physical Uranium (U-UN.TO)
- down -4.70% so far on GLOBAL X URANIUM ETF (URA)
Sorry for postponing that publication, I have been so busy with my new ventures!
None of the information provided in this email constitutes financial advice. This is intended for entertainment, education and general information only. Appart from being long those instruments, we have no affiliation with those products or the companies managing them. The paper that sparked my interest: https://pracap.com/the-new-gbtc/ We are not affiliated with Praetorian Capital either and are not investors in any of their funds.
About me:
Victor Martin (twitter | linkedin) Founder, CEO le tapyr SA
I support single family offices in mastering highly diversifed portfolios in the whole spectrum of classes, with a slight focus on private equity, venture capital, hedge funds, direct investments, credit, collectibles and commodities.