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Anton Chigurh

13,097 Posts.

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27/07/18

13:30

Post #: 34594640
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Originally posted by Anton Chigurh ↑

But they don't always turn the supply back on as soon as price recovers. It's a much more opaque and nuanced market than say, zinc, where we knew Glencore and Co could turn it back on at will (they didn't immediately but had the ability to). The game of chicken with uranium will be major suppliers withholding that supply from utilities and themselves going to the spot market to fulfill contracts. At some point that curtailed supply will come to market but once under C&M startup takes time and in the meantime the idea would be that further Japanese reactors come back online and new Chinese reactors.

Lots of moving parts and nobody knows for sure how they all sync together but to me, uranium is a classic straw hats in Winter investment. This round might just be a bounce but when you have a mineral with an elastic demand profile that is trading well below the industry COP, something always gives in time. Potash will present the same opportunity in the next couple of years.

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That should read, "mineral with inelastic demand"

XAO Value at posting: 6,382.7
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