Materials Analyst/Strategist, Janus Analysis

Gaius King

Materials Analyst/Strategist

Janus Analysis

Commodities

<ul>
<li>Primary supplies covered 83% of 2018 demand, secondary the remaining 17%</li>
<li>Primary production reduced by 7,100/t pa by producer cuts</li>
<li>Forecast that Primary and Secondary supplies sufficient to meet 100% of 2020 demand</li>
<li>Global nuclear generation to fall from 2675.4 to 1897.4TWh over next 30-years</li>
<li>
<a href="https://www.smartkarma.com/entities/nac-kazatomprom-jsc" target="_blank" data-smartkarma-citation="entities:27845:1" rel="noopener">NAC Kazatomprom JSC (KAP LI)</a> will increasingly dominate global primary supply</li>
<li>US$24.60/lb U3O8 (Spot price ) implies 76% to 87% of producers covering "operating costs"</li>
<li>Substantial inventories exist on current marginal demand, sufficient for 300 years</li>
<li>Expect long-term prices to stabilise at ~US$16-19/lb U3O8</li>
<li>Carbon-free economy impossible without wide-spread re-adoption of nuclear power</li>
</ul>


Primary supplies covered 83% of 2018 demand, secondary the remaining 17%
Primary production reduced by 7,100/t pa by producer cuts
Forecast that Primary and Secondary supplies sufficient to meet 100% of 2020 demand
Global nuclear generation to fall from 2675.4 to 1897.4TWh over next 30-years

NAC Kazatomprom JSC (KAP LI) will increasingly dominate global primary supply
US$24.60/lb U3O8 (Spot price ) implies 76% to 87% of producers covering "operating costs"
Substantial inventories exist on current marginal demand, sufficient for 300 years
Expect long-term prices to stabilise at ~US$16-19/lb U3O8
Carbon-free economy impossible without wide-spread re-adoption of nuclear power


Primary & Secondary Supply Sufficient to Sate Global Uranium Demand for the Foreseeable Future

<ul>
<li>Nuclear plant closures will outnumber newly constructed within 18-24 months</li>
<li>Plant closures the West to on outstrip new construction facilities in the East</li>
<li>Modelled global nuclear power generation demand to 2050</li>
<li>Global nuclear generation to fall from 2675.4 to 1897.4TWh over next 30-years</li>
<li>China has only commenced a single power plant in past four years</li>
<li>Forecasts for US, UK, France, China, Japan, Korea, Germany, Russia, Taiwan, Canada and India</li>
<li><a href="https://www.smartkarma.com/entities/nac-kazatomprom-jsc" target="_blank" data-smartkarma-citation="entities:27845" rel="noopener">NAC Kazatomprom JSC (KAP LI)</a> will increasingly dominate global primary production</li>
</ul>


Nuclear plant closures will outnumber newly constructed within 18-24 months
Plant closures the West to on outstrip new construction facilities in the East
Modelled global nuclear power generation demand to 2050
Global nuclear generation to fall from 2675.4 to 1897.4TWh over next 30-years
China has only commenced a single power plant in past four years
Forecasts for US, UK, France, China, Japan, Korea, Germany, Russia, Taiwan, Canada and India
NAC Kazatomprom JSC (KAP LI) will increasingly dominate global primary production


Uranium: 30% Decline in Demand Over Next 30 Years

Accelerating Tomorrow’s Independent Research

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Thematic (Sector/Industry)

<ul>
<li>Quantifying nuclear statistics with substantial discrepancies</li>
<li>LT contracts &amp; speculative hoarding driving recent 40% spot price increase</li>
<li>Primary/secondary Uranium supplies currently 112% of 2017 demand</li>
<li>Uranium supply deficits extremely unlikely before 2022</li>
<li>Global Uranium demand to fall 25-40% by 2050</li>
<li> Primary Uranium sector LT SELL</li>
</ul>
We have independently audited global nuclear construction statistics in order to determine future Uranium demand.  Although near-term statistics match those in the public domain, long-term demand determined via construction pipeline illustrates substantial discrepancies.  Compiling planned plant construction, operational extensions, nameplate upgrades, versus decommissioning announcements/events, and in many cases, public policy inertia; has led us to believe that despite historical primary supply shortages, global nuclear demand peaked in 2006.
Since plateauing and despite strong Chinese growth, nuclear power generation has fallen &lt;2% over the past two decades, a decline that is predicted to accelerate as a number of developed and developing nations pursue other energy options.
The macro-trend not replacing existing nuclear infrastructure means (dependent on assumptions), according to our calculations, global uranium demand will decrease between 20 to 40% by 2050.
As opposed to signifying a fundamental change in underlying demand, we believe that recent Uranium price increases are the result of producers closing primary operations, and substituting production with purchases on the spot market to meet long-term contract obligations.  In addition, hedge funds are buying physical uranium in order to realise profits on potential future commodity price increases.  Critically, we determine that primary and secondary supplies are more than sufficient to meet forecast demand over the next four to five years; before taking into account substantial existing global uranium stocks, some of which are able to re-enter the spot market at short notice.


Quantifying nuclear statistics with substantial discrepancies
LT contracts &amp; speculative hoarding driving recent 40% spot price increase
Primary/secondary Uranium supplies currently 112% of 2017 demand
Uranium supply deficits extremely unlikely before 2022
Global Uranium demand to fall 25-40% by 2050
 Primary Uranium sector LT SELL

We have independently audited global nuclear construction statistics in order to determine future Uranium demand.  Although near-term statistics match those in the public domain, long-term demand determined via construction pipeline illustrates substantial discrepancies.  Compiling planned plant construction, operational extensions, nameplate upgrades, versus decommissioning announcements/events, and in many cases, public policy inertia; has led us to believe that despite historical primary supply shortages, global nuclear demand peaked in 2006.
Since plateauing and despite strong Chinese growth, nuclear power generation has fallen &lt;2% over the past two decades, a decline that is predicted to accelerate as a number of developed and developing nations pursue other energy options.
The macro-trend not replacing existing nuclear infrastructure means (dependent on assumptions), according to our calculations, global uranium demand will decrease between 20 to 40% by 2050.
As opposed to signifying a fundamental change in underlying demand, we believe that recent Uranium price increases are the result of producers closing primary operations, and substituting production with purchases on the spot market to meet long-term contract obligations.  In addition, hedge funds are buying physical uranium in order to realise profits on potential future commodity price increases.  Critically, we determine that primary and secondary supplies are more than sufficient to meet forecast demand over the next four to five years; before taking into account substantial existing global uranium stocks, some of which are able to re-enter the spot market at short notice.

Uranium - About to Enter Its Own Nuclear Winter

Over 25-yrs in Global Materials & Soft Commodities

Charles Spencer

INVESTMENT VIEW:  We believe <a href="https://www.smartkarma.com/entities/27448" target="_blank" data-smartkarma-citation="entities:27448:1">Uranium (UXA COMDTY)</a> prices have the potential to rally further following a number of recent supply-side adjustments aimed at reducing and managing industry oversupply.  
This should bode well for industry majors like <a href="https://www.smartkarma.com/entities/27155" target="_blank" data-smartkarma-citation="entities:27155:1">Cameco Corp (CCJ US)</a> and may also support junior miners like <a href="https://www.smartkarma.com/entities/27449" target="_blank" data-smartkarma-citation="entities:27449:1">Azarga Uranium (AZZ CN)</a> for investors with a higher risk/reward profile. 
The CEO of Toronto listed <a href="https://www.smartkarma.com/entities/27449" target="_blank" data-smartkarma-citation="entities:27449:1">Azarga Uranium (AZZ CN)</a> was in Singapore last week and below is a summary of our conclusions:

INVESTMENT VIEW:   We believe Uranium (UXA COMDTY) prices have the potential to rally further following a number of recent supply-side adjustments aimed at reducing and managing industry oversupply.  
This should bode well for industry majors like Cameco Corp (CCJ US) and may also support junior miners like Azarga Uranium (AZZ CN) for investors with a higher risk/reward profile. 
The CEO of Toronto listed Azarga Uranium (AZZ CN) was in Singapore last week and below is a summary of our conclusions: 

Azarga Uranium Meeting Highlights Industry at Inflection

Price Gauge
52-week Range	0.00 - 0.00
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Uranium (UXA COMDTY)

Primary & Secondary Supply Sufficient to Sate Global Uranium Demand for the Foreseeable Future

Primary supplies covered 83% of 2018 demand, secondary the remaining 17% Primary production reduced by 7,100/t pa by producer cuts Forecast that...

Gaius King

Uranium: 30% Decline in Demand Over Next 30 Years

Nuclear plant closures will outnumber newly constructed within 18-24 months Plant closures the West to on outstrip new construction facilities in...

Gaius King

Uranium - About to Enter Its Own Nuclear Winter

Quantifying nuclear statistics with substantial discrepancies LT contracts & speculative hoarding driving recent 40% spot...

Boost Research

Azarga Uranium Meeting Highlights Industry at Inflection

INVESTMENT VIEW: We believe Uranium (UXA COMDTY) prices have the potential to rally further following a number of recent supply-side adjustments...

Charles Spencer

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)