U Insider take Analysis:This uranium sector is trading sharply...

U Insider take

Analysis:This uranium sector is trading sharply to the downside today, and it appears that several dollars are going to be shaved off today’s spot price quote. Apparently the market is disappointed with the fact that Cameco’s 2024 production guidance wasn’t weaker. From our vantage point, we heard nothing whatsoever that disturbs our long-term case for bullish uranium…but Cameco’s insistence that they will hit their 2024 production targets – despite having to downgrade their own 2023 production targets twice last year – seems to have “spooked” the market that was seemingly hoping for shakier 2024 guidance. Consequently, we are experiencing one of the periodic convulsions that is part of being invested in this sector. Ironically, the expected production increases in 2024 for both Cigar Lake and McArthur River still result in the Company having to come to the market to buy lbs. We fully expect to see continued pressure in both the spot and term markets going forward this year.To put it in its simplest terms – there is a very large structural deficit that exists in the uranium market. Whether Cameco actually produces 24 million pounds or 22 million pounds this year, neither figure will solve that deficit. Perhaps some “late money” is hitting bids…we can’t be sure. This too shall pass because the fundamentals for significantly higher uranium prices remain fully intact.