Don't worry about uranium market. It will be ok.
Peninsula have some problems. If they do produce efficient- this will go to 3$ and above in no time.
If not, we can see some selloff. Today's price represents liquidation value I think.
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Uranium“South Carolina utility Santee Cooper is seeking bids to restart construction of two reactions at the VC Summernuclear Stations, as surging electricity demand nationwide rekindles interest in atomic power.” January 22,2025, BloombergSpot uranium prices continued to drift lower throughout the fourth quarter, starting at $82per pound and closing at $73—a nearly 10% decline. In contrast, long-term contract prices,which reflect agreements between producers and utility buyers, remained firm, ending thequarter at roughly $81 per pound. The divergence between spot and term prices is telling:while speculative flows drove uranium’s rally in mid-2023, momentum stalled in early 2024,prompting hedge funds and other fast-money traders to unwind their positions over thepast nine months. The discount in spot prices relative to term contracts strongly suggeststhat speculators have now largely exited the market, removing a source of short-term volatilityand setting the stage for a more sustainable price floor—a positive development overall.
Yet, while uranium prices softened, the fundamental backdrop for nuclear power remainedanything but weak.The most notable—and most widely misinterpreted—development came at the end ofJanuary, when Chinese AI developer DeepSeek announced that its new algorithms couldexecute complex AI modeling tasks using only a fraction of the energy required by Westerncompetitors. Investors, fixated on the headline implication that AI-driven electricity demandmight be far lower than originally expected, panicked. In the days following the announce-ment, uranium stocks plummeted nearly 11% on average, as markets indiscriminately soldoff anything tied to the AI-energy narrative.For those familiar with technological history, this reaction was deeply flawed.In our Q3 2023 letter, we introduced Dr. Jevons, or "How I Learned to Stop Worrying andLove Demand," an essay exploring Jevons’ Paradox—the idea that as a technology becomesmore efficient, its overall usage tends to increase at a nonlinear rate. Applied to DeepSeek’sbreakthrough, the logical conclusion is not that AI-related energy consumption will decline,but rather that it will skyrocket. If DeepSeek has truly made AI computing 100 times moreefficient, Jevons’ Paradox suggests that demand for AI computing will rise by orders ofmagnitude—potentially by 10,000 times.
After the DeepSeek news, numerous market commentators began debating the paradox’sapplicability to AI—a topic we addressed nearly 18 months ago. While the idea may seemcounterintuitive, history provides countless examples of Jevons’ Paradox at work. Moreefficient steam engines led to more, not less, coal consumption. Cheaper semiconductorsdrove exponential increases in computing power demand. And if AI processing becomesGoehring & RozencwajgNatural Resource Market Commentary25vastly more efficient, it will become vastly more ubiquitous—driving far greater demand forenergy, not less.The knee-jerk selloff in uranium miners, natural gas producers, and nuclear utilities was notjust an overreaction—it was a misreading of the core drivers of future energy demand. AsJevons’ Paradox takes hold in the AI industry, energy consumption will surge, not decline.Investors who recognize this now have a significant buying opportunity in the very sectorsthat will be essential to meeting AI’s growing power needs.In our last letter, we outlined our conviction that a new investment cycle in nuclear powergeneration is on the horizon—driven by the adoption of molten sodium reactors. Thesereactors, which operate at atmospheric pressure, require significantly less steel and cementto construct and eliminate many of the operational risks inherent in traditional high-pres-sure water-cooled reactors.Shortly after we wrote that, Meta made headlines by issuing a Request for Proposal (RFP)to the nuclear energy industry, seeking partnerships to address its rapidly growing powerneeds in the cleanest and most sustainable way possible. The company’s proposal aims todevelop between 1 and 4 gigawatts of new nuclear generating capacity in the United States.Meta has stated its willingness to partner with and invest in nuclear developers that cansuccessfully permit, design, engineer, construct, and operate these plants.In its December 2, 2024, press release, Meta made its stance clear:“We believe that nuclear energy can help provide firm, baseload power to support the growingneeds of the electric grids that power both our data centers and the communities aroundthem. Meta believes nuclear power will play a pivotal role in the transition to a cleaner, morereliable, and diversified electric grid.”Meta is not alone. Amazon, Google, and Microsoft have all announced plans to incorpo-rate nuclear power into their data center energy strategies.
The wave of corporate interest in nuclear energy continued with another major announce-ment. Oklo, a leading developer of molten sodium small modular reactors (SMRs), andSwitch, a large data center operator, disclosed they had signed one of the largest corporatepower agreements in history. Under the deal, Oklo will deploy 12 gigawatts of its SMRtechnology to power Switch’s data centers across the United States. Oklo will develop,construct, and operate its Powerhouses—as it calls its SMRs—under a long-term series ofpower purchase agreements.Switch CEO Rob Roy underscored the scale and significance of the agreement:“Our relationship with Oklo underscores our commitment to deploying nuclear power ata transformative scale for our data centers, further enhancing our offering of one of theworld’s most advanced data center infrastructures to current and future Switch users.”These announcements represent a seismic shift in how corporate America views nuclearenergy. The demand for AI-driven computing is growing exponentially, and with it, the needfor stable, carbon-free baseload power. The world’s largest tech companies are no longerwaiting for policymakers to act—they are directly investing in nuclear power to secure theirenergy future. This marks the beginning of what could be the most important investmentcycle in nuclear energy since the mid-20th century.Goehring & RozencwajgNatural Resource Market Commentary26And finally, yet another major announcement—one that could significantly impact thefuture of nuclear power—came from Santee Cooper, the South Carolina utility.In a January 22, 2025 press release, Santee Cooper announced it was seeking to restartconstruction on two long-abandoned reactors, VC Summer Nuclear Units #2 and #3. Citingsurging electricity demand and a renewed interest in nuclear power, the utility revealed thatit was actively looking for buyers to take over and complete the two unfinished reactors.Santee Cooper’s CEO, Jimmy Stanton, put it plainly:“We are seeing renewed interest in nuclear energy, fueled by advanced manufacturing invest-ments, AI-driven data center demand, and the tech industry’s zero-carbon targets.”The history of the VC Summer project is well known.
When final construction permitswere issued in 2008, the cost to build both reactors was estimated at $9.8 billion. The reactors,both Westinghouse AP1000 designs, officially broke ground in 2013. However, the projectquickly became plagued by delays and massive cost overruns. By 2017, estimated comple-tion costs had ballooned to over $20 billion, ultimately forcing Westinghouse into bankruptcy.That July, SCANA and Santee Cooper announced the complete shutdown of construction,declaring the plants “abandoned.” At the time, Unit #2 was estimated to be nearly 50%complete, while Unit #3 remained in an earlier phase of construction.Now, nearly a decade later, the project appears to have a second chance. While it remainsunclear who the buyers will be, the fact that Santee Cooper has made the decision to activelypursue a sale suggests that serious interest exists. If a buyer emerges, it would be anotherpowerful signal that a new investment cycle in nuclear energy is not just beginning—it isaccelerating.The steady stream of positive developments for the nuclear industry shows no signs ofslowing. From major corporate commitments to small modular reactor (SMR) investments,to the potential revival of large-scale conventional reactors, the momentum is unmistak-able. The long-dormant nuclear renaissance is now underway, and with it, a major structuralshift in uranium demand.The good news just keeps coming.
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