Uranium bull market in making

By -

TIME is my favorite commodity. Second is Uranium.

Do you wish you had invested in renewables like wind and solar before massive gains these sector saw in last 3 years?

You gonna witness greatest bull market in energy sector in coming years. That's Uranium.

Here's the graph of previous uranium bull market. Price of commodity itself rose 7x from under 20$ per pound to 140$ per pound. Uranium equities saw 100x returns.

 
 
 What went wrong? The infamous Fukushima accident in 2014 in japan shook the world. Japan turned off all its nuclear reactors. From a large uranium buyer, Japan turned into net seller of uranium in spot market. Uranium price plummeted, equities fell like a rock and whole uranium industry is starved off the capital.

Now as we transitioning from hydrocarbons to renewables, we are realizing that negative sentiment towards uranium was over exaggeration. After all, uranium has caused least amount of human deaths than any other energy source, its reliable source of base load energy, with amount of radioactive waste ever generated that can easily fit into a Olympic size swimming pool and only source with zero carbon emission.


We can complain about number of bird species at risk due to wind power and land requirements for solar some other time. And hydro, complete armageddon of natural ecosystem.

Lets face the reality, nuclear maybe best in terms of science but world doesn't work that way. Nuclear energy brings along stigma to people, media and environmentalists.

Its changing now, environment activists and governments are now recognizing its difficult to achieve carbon neutrality without having nuclear in energy portfolio.

China, India and Russia , these are the countries who plan on fundamentals and not emotions. They are building massive capacity of nuclear energy in coming years.

Future demand is going to exceed the supplies of uranium by a long shot, and couple it with years of   capital starvation in the industry and you get an incredible bull market.

Also big money will be pouring in by ESG funds. Green investing and ESG has been a theme since 2-3 years and now this wave of money is looking for home. Uranium can be its next stop.

To sweeten the already sugar sweet deal, USA has announced subsidies for
Nuclear power.


Fourth generation reactors is latest development in Nuclear power sector which has promising results. New reactors are being safer, more reliable, longer life and smaller with integrated waste management. Bill Gates is backing new nuclear reactors research too.




 This chart well explains the supply side constraint.


So, aren't there any risks? 

There is a very rare but huge risk if god forbid another Fukushima happens. And there is risk from thorium reactors which are capable of producing energy by thorium instead of uranium and produce non radioactive waste. Anyone investing in this space must remain aware on these risks.

Final question, How to invest in Uranium?

We at Garg Capital are always inclined toward the large cap liquid names. While smaller names may provide many folds better returns, liquidity and volatility makes these names unsuitable for smaller investors.

$URA $URNM are two best etfs with ample liquidity and holdings in major large cap uranium produces. To invest in Uranium sector from India contact us we are happy to explain how to reach global markets from India.

Consider following on twitter for instant updates on various markets and finance themes.


 Thanks & Regards

Akhil Garg, CIO, Garg Capital

akhilgargdps@gmail.com

akhilgarg17@yahoo.in

 Garg Capital Twitter account

contact us on 8383010202

 

 

 

THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY.



 


Comments

Post a Comment

Popular posts from this blog

Therapeutic Nutrition

By -
More I learned about Nutrition, more I got into the complexity of biology. Our bodies and how food interacts with our body is highly complex science.  Here's a little background of me. I used to weigh 95 kgs 3 years back. I googled standard guidelines posted by WHO and FDA. I followed these for exactly 6 months I remember. I worked out and ate like a nerd, counting my calories, stripping my food of any saturated fat and doing cardio. After 6 months, I weighed 96 kgs with even lesser energy and mental clarity. Not to mention dieting and tiring cardio sessions.  I started to look beyond conventional science and guidelines. I was amazed by what I learned. Everything conventional academics say about nutrition is false, and its not exaggeration. Even our modern diet is root cause of epidemic of chronic diseases like diabetes, hypertension and obesity. In case of every macro-nutrient, modern science has taken things wildly wrong.  Fats, firstly they demonized fat for cardiovascular disea
Read more

Indian Sugar Industry

By -
Image
Indians have a sweet tooth. We consume approximately 370 lakh tons of sugar a year. But we also produce 650 lakh tons. Sugar industry is cyclical and market is usually traded by professional traders. But things are changing, partly because of climate and partly government policies. Sugar stocks are poised for long term growth and re-rating & reprising of this sector. CLIMATE  & INTERNATIONAL MARKETS Apart from India, Brazil and Thialand are two big producers and exporters of sugar in international market . But due to change in climatic conditions there has been failure of Sugarcane crop in Brazil . Brazilian Sugar production fell and new sowing data is showing there is reduction in Sugarcane crop and it is expected that sugar production will again decline in 2021-2022 by Brazil. There is also secular reduction in sugar production in Thiland. Due to this lower sugar production, prices are rising in international markets. This set to benefit Indian Produces. ETHANOL P
Read more