Will 2025 bring back the Uranium stocks?.
Happy New Year to everyone. I was away for couple of weeks. Was hoping to see some change, but looks like another waiting game. Until today. Is that the turn?
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A very forgettable year of AEE and nearly all Uranium stocks. I have last 2 years numbers below. Not a happy look, unfortunately, but better to know than ignore.
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For the year 2024, AEE lost around 53%. Average loss across 33 stocks was 40%. So on average, stocks lost at least half of their value (considering some were in green).
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This was third year in a row where many U stocks had a topsy turvy yearly play. In 2023, AEE gained 4%. But in 2022 it lost 6%. So price was 27c on 1st Jan 2022. We are still down. So even for 3 year holders its a loss. Nearly 50% loss. Difficult to think when everyone including Cameco boss says that macro has been best it has ever been. But I heard that a year back as well. So very difficult to judge.
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So one would think we should have great 2025. But looking back, last year in January we started big. Spot price reached 106. We thought it was the beginning. Not many would have thought that was the high for the year. Many pundits, Cameco boss, all X experts were calling that this is the beginning. 2024 may not have ended as many would have thought in January. Just shows its not easy to predict.
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So why did we go down as a sector? Why are the U stocks struggling, infact many making losses, when they say, U macro has never been better? One simple thing I can think of. Supply squeeze. Many have been saying that there is a supply squeeze. The demand is so strong that it will not be met by current plays. That may be true. But are there any numbers to justify? Not yet. I have been looking for close to 4 years, there is none. There are speculations, there are guesses, there are rumours - but no concrete figures.
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Uranium demand/supply is a black box. Most, or should I say anyone, does not know what those numbers look like. Most transactions happen long term contracts, many are secrets, from price perspective. We don't know exactly how much is needed. Especially Secondary Supply, old nuclear plants, missiles etc. And as happens, depending on which side of fence we are, one exaggerates to each direction. I like Uranium play and have playing for close to 4 years. But one thing I learnt long time back.
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The sector can be played. Big time. By just a few because its small. Push the spot price down, it may take only a few million to push it down. Then buy stocks which have lost heavily. Then push spot price up. Another few million. It will push stock price up. Make hundreds of millions. So one has to be cautious.
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One thing which I write every few months, to keep myself not getting into euphoria and has worked well. In 2018 there was a big article which I have also posted here said - Uranium supply squeeze is right in the corner. Now we are reaching 7th year, 2025, and still looking for that corner. So its best to be pragmatic. I know, I will be blasted by U fanatics for this statement, but all year long I feel my prediction has not been bad, compared to the X spruikers.
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So what may happen next week? Another turmoil happening. CCJ needs to hold 50, from a drop of 62. If it doesn't hold 50, all bets are off. Last few days its trying to hold here. It is holding. So that is good. Kaz news helped today, for the sector, stocks which were looking for cover.
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The question one needs to ask oneself - if U macro is so strong, why are U stocks weak? Secondly, today, Kaz gave a boost. If tomorrow, if Kaz says, issue is resolved, that means all stocks go down? So one can see how flimsy the rise and fall can be. But odds are still good that we may have better 2025 than 2024. But it still needs to happen. Its best to have an open mind. And follow price action.
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Here are the numbers for last 2 years -
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(20min delay)