dead cat bounce according to MS. Uranium contracting demand...

dead cat bounce according to MS. Uranium contracting demand extremely weak. +20% sector wide is over done.

Morgan Stanley's take

The downgrade might have triggered a knee-jerk reaction, according to Morgan Stanley."The new guidance is in line with our 2025 estimate of 25,200 tonnes but above Visible Alpha consensus of 23,000 tonnes," the analysts said in a note on Friday."Our supply-demand balance still shows the uranium market in a deficit in 2025, but this is a lot smaller than deficits seen in previous years, and Kazatomprom has also said it remains committed to its 2025 contractual obligations and will use its "comfortable level of inventories" to meet these."The analysts believe there's limited downside to current prices but choose to stay on the sidelines due to "very weak contracting activity" from the utility sector (down 71% year-on-year in the first half of 2024) and uncertainty on the US ban on Russian uranium.