Update - here: https://www.telegraph.co.uk/business/20 ... t-success/
Yellow Cake has been buying more uranium ... another step in what I believe is a real investment opportunity - the uranium fuel market.
Note that I hold CAMECO shares having bought them about a year ago - CAMECO are a Canadian miner and producer of uranium fuel for reactors.
After the Japanese earthquake and tsunami which devastated the Fukushima area and the nuclear power station there, Japan turned off all its reactors and other countries took note and slowed nuclear power plant building or said they'd end nuclear power all together (eg Germany). Not surprisingly the price of uranium oxide, the fuel for reactors, tanked as did shares in the producers including CAMECO.
Now there is a spot market for uranium but this bears little relationship to the long term contracts that nuclear power plant operators need to secure fuel for the future. So while the spot price crashed, suppliers like CAMECO continued to make a profit producing the fuel.
In the last few years, new nuclear reactors have been built and are about to come on line, the Japanese have quietly and slowly been turning the other power stations reactors back on (they have to as they import all their energy generating fuel and need to keep emissions down).
The market and supply is now tightening dramatically as CAMECO (the 2nd largest producer) has closed production at their main sites, the Kazakh producer, Kazatomprom, is the largest but has also cut back production as it prepares for a stock market float and Yellow Cake and CAMECO have been buying on the open market. CAMECO do this as it's cheaper to buy on the open market to satisfy their long term contractual obligations than mine their resources! Kazatomprom is state controlled however and may suffer sanctions from Trump, as their production is/was subsidised.
The final piece in this story - and why I invested - is that the long term supply contracts for many operators are due to be renewed and renegotiated over the next few years. Combine this with an increasing demand because of the many new power stations and reactors coming on line, the tightening supply and demand situation and I expect to see CAMECO shares - which are near long term lows - recover substantially.
Green energy from wind and solar is growing but for low CO2 emission energy, that is reliable, safe and provides the base load, nuclear has a major role despite what you may read. Coal is horribly dirty and will be phased out - especially in China I suggest (and I've experienced the coal fired smog there!) where the huge and increasing demand for energy is combined with the governments fear of their population's increasing complaints about air quality.
CAMECO is well managed, in a stable, secure outry (Canada), has cash, long term contracts and can sit this out for a long time - I am betting that as existing nuclear fuel is used up or sold, the lack of new production from many sites, the increased and new demand for fuel from the increasing "fleet" of reactors will trigger eventually an upsurge in the uranium price and hence CAMECO.
Please DYOR - there are risks here! The spot market, international politics, sanctions, the secrecy around the long term contracts and a fair amount of excitable hype from various web sites! Plus some have been predicting a recovery in uranium prices/market for 10 years so this current situation could persist!
Plenty of good articles out there and reliable sources of information - e.g., https://www.telegraph.co.uk/business/ur ... hy-invest/
, https://moneyweek.com/491027/investing- ... -comeback/
One can also invest in other uranium companies (eg Berkeley Energia), an ETF I believe and of course, Yellow Cake. DYOR!