Happy New Year to everyone. 2021 is behind us, and we have 2022 ahead of us. Today I will mention the three biggest positive triggers I am looking at in the uranium sector in the coming year. I hope that 2022 will be a great year for us all.
Long-term contracts
We have heard of some contracts being signed in 2021. I expect we will see even more of this activity in 2022.
“a reactor that runs out of uranium is just an expensive paperweight.”
Kuppy
There is no substitute for uranium. We are now one year closer to the years 2024 to 2026 where a lot of contracts roll off.
I used the above graph a lot last year, and I hope we will see a 2022 version of it.
Companies like Kazatomprom and Cameco need communication from their customers if they are to increase their production after 2023. Producers increasing production will however not be enough. New mines need to come online to cover demand at the end of the decade. There are some developers aiming to get in production after 2025, but you only want part of your supply coming from an unproven entity.
EU green taxonomy
It looks more and more like we will get nuclear power (and gas) included in the green taxonomy. A draft for the taxonomy text was sent just minutes before central Europe went into the new year and 2022. There are still possibilities for delays with the EU bureaucracy, but getting a draft out before 2022 leaves me hopeful.
Getting access to financing at more favorable terms, and access to a bigger pool of investment groups can do a lot for the build out of more nuclear reactors. The sector has had several regulatory disadvantages that have made construction of nuclear plants very slow and costly compared to other alternatives. Just changing this slightly can be very positive for the future of nuclear power in the European Union. Before 2021 this was not on our radar so this change is already very positive.
SPUT NYSE listing
The last factor I am looking at is the listing of Sprott Physical Uranium Trust on the New York Stock Exchange. With an investment pool that is about 10x the size of the Toronto Stock Exchange, ($28T vs $3T) this can have a very big impact. If we get interest from big financial players, we might see a price where more of the above ground inventory moves into Sprotts hands. Mobile inventories of uranium being sold into the market, and Kazatomprom flooding the market with cheap pounds, are two of the most popular bear arguments for the sector. The more answers we get to these arguments, the better it is for investors.
Conclusion
These are the three things I am looking at in 2022. If you have other ones just leave a comment here or on Twitter.
I started already with uranium participation those days.
I’m happy
It is a possibility the ETF URA will add SPUTT to their portofolio like URNM has. This could also be a great source of capital going straight to SPUTT to buy more physical uranium.
The commodity sector seems to be the place to bet on for the coming years and uranium one of the great picks. Great to be in a bullish phase for the sector and commodities in general Good luck to all who participate in the happening!
Also great blog, keep up the good work!