The conflict between the buy side and sell side was included in...

The conflict between the buy side and sell side was included in the stock price targets - a bull U market will remove any negative effect of the Con note, continued sub $27 will allow the con note to over power the buy side - creating a great entry point for when the U market moves through $35.

On a previous posting we detailed a selection of catalysts - the key for last cycle and today is the supply destruction and the increasing uncovered demand from 2020-2022 which effectively means at some point the "mobile" inventories will be taken out (on top of this note the 18-24 month fuel cycle). The situation becomes critical within the next 24 months.

Regarding China - if you buy the mines you are stockpiling (they are acquiring something every 9-15 months), you don't need to buy when the you own the pounds in the ground.

Regarding KAP - as high cost producers continue to close mines as their term contracts expire this will remove more pounds than KAP can increase supply by over the next 36 months.

Quoting a global inventory number without any regard for what will actually end up in the fuel cycle in the near term is wasting everyones time.

My Bull thesis is based on remaining high cost producers shutting down and removing another 30-50mil pounds from the market over the next 18-36 months (if the spot doesn't recover earlier) coupled with material levels of uncovered demand from 2020-2022 forcing Utilities to come back to the contracting table. I don't need to focus on Chinese demand when Utility reactor closures are being pushed out another 10-15 years, the independent forecasters are looking at 220-260mil pounds of annual usage by 2030; thats a deficit of 90-170mil pounds per year on existing primary supply. Cameco couldn't buy 1mil pounds on the spot market around current price last month (they are looking for 15mil pounds in 2019); what will happen when US Utilities return to the contracting table 2H 2019? You would say nothing due to inventory levels being so high; I would say real "mobile" inventory levels will be depleted within 24 months by further supply destruction - creating a short in the spot market pushing the spot up by 150-250% over 24 months. Cycles repeat themselves and the conditions for this around the corner (3, 6 or 12 months).