Uranium has the 'most compelling value proposition since pre-Fukushima' - Haywood

Michael McCrae Monday February 03, 2020 16:09

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Haywood said uranium is in the early stages of a bull market due to supply constraints.

Haywood made the forecast in a research note released today.

"Previously enacted and expected major supply cuts are starting to erode global inventories with primary production now less than reactor demand," said Haywood.

Analysts said the effect of production cuts from some of the world's largest suppliers are finally being felt. Since the drop in uranium prices post Fukushima,

Haywood doesn't see an immediate turnaround. It warns that in the near-term any supply shortfalls felt by reactors will be moderated by a global inventory surplus built over the past eight years.

"But we expect prices to build steadily toward 'new supply' incentive prices in the coming years. We believe that the uranium equity universe will lead the charge higher in anticipation of higher uranium prices, as the sector offers its most compelling value proposition since pre-Fukushima."

Under its top picks, Haywood singles out NexGen and Azarga Uranium as deserving investor attention.

By Michael McCrae

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